India secures fertiliser supplies from Russia

Other News Materials 30 May 2022 13:07 (UTC +04:00)
India secures fertiliser supplies from Russia

India has finalised critical supply of fertilisers from Russia under a barter agreement, as talks concluded on a multi-year import deal, according to multiple officials.

India imports most of its fertilisers, which is crucial because nearly half the population depends on a farm-derived income and the Black Sea conflict trimmed its fertiliser balance ahead of the crucial summer-sown June-September kharif season. Agriculture accounts for 15% of India’s $2.7-trillion economy.

To hedge against geopolitical flux and globally high prices, India opened government-to-government talks in February with Russia for the long-term import of fertilisers.

Russia will supply crop nutrients via a barter system avoiding dollar transactions due to US sanctions, as Russian importers will exchange fertilisers for various Indian commodities, including tea, raw materials and auto parts.

Velina Tchakarova, the director of Austrian foreign policy think tank AIES, tweeted: “India is 2nd largest importer aiming for 1 million tonnes of di-ammonium phosphate (DAP) and potash; and about 800,000 tonnes of nitrogen, phosphorus, potassium (NPK) from Russia every year.”

An official said India had “legitimate national interests” and to fulfil them the India side had initiated talks for multi-year import for fertilisers for the first time in decades.

Russian importers will import fresh farm produce, medical devices, auto parts and other key commodities from India under the barter, a second official said.

Amid a surge in global prices of fertilisers, the Modi government on May 21 said the government would provide additional fertiliser subsidy of ₹1.10 lakh crore to cushion farmers from prices.

The additional allocation has doubled the government’s total fertiliser subsidy bill to a record ₹2.15 lakh crore in the current fiscal (2022-23).

“Despite rising fertiliser prices globally, we have protected our farmers from such price hikes. In addition to the fertiliser subsidy of ₹1.05 lakh crore in the budget, an additional amount of ₹1.10 lakh crore is being provided to further cushion our farmers,” finance minister Nirmala Sitharaman had tweeted.