India is preparing to establish its first urea manufacturing facility in Russia, marking a strategic move to secure long-term fertiliser supplies and reduce vulnerability to global price fluctuations. The proposed plant, backed by state-owned Rashtriya Chemicals and Fertilisers (RCF), National Fertilisers Ltd (NFL), and Indian Potash Ltd (IPL), is expected to be announced during Russian President Vladimir Putin’s visit to India in December 2025.
Strategic Partnership Details
Companies and Agreements
The three Indian fertiliser companies have already signed non-disclosure agreements (NDAs) with Russian companies to initiate groundwork for the project. The facility is expected to produce more than 2 million tonnes of urea annually, addressing a significant portion of India’s 35 million tonne annual urea consumption, of which 30-40% is currently imported. Negotiations are progressing on critical aspects including land allocation, pricing for natural gas and ammonia, and transportation logistics.
Why Russia
Russia’s abundant reserves of natural gas and ammonia make it an ideal partner for India, which lacks these essential raw materials domestically. Russia holds reserves of 38 trillion cubic meters of natural gas and is a major ammonia exporter, providing India with access to feedstock at potentially 20-25% lower costs than current import prices. This partnership deepens the India-Russia economic cooperation framework, which has already seen bilateral trade reach $65 billion in 2024-25, primarily driven by energy and agriculture sectors.
Context and Rationale
Recent Fertiliser Crisis
The project comes in response to an acute fertiliser shortage during India’s 2025 kharif (monsoon) planting season, when China temporarily halted exports of urea and other soil nutrients. This disruption forced India to source supplies from alternative markets at significantly higher prices, straining the government’s subsidy budget and raising concerns about food production security. With a well-distributed monsoon increasing fertiliser demand and the upcoming rabi (winter) season requiring intensive nutrients for wheat cultivation, securing stable supplies has become critical.
Growing Russia-India Fertiliser Trade
Russia has already become a major fertiliser supplier to India following Western sanctions, with exports increasing 20% to 2.5 million tonnes in the first half of 2025. Russian fertilisers now account for a record 33% of India’s total fertiliser imports, meaning every third tonne imported by India originates from Russia. This growth has been primarily driven by increased supplies of phosphorus-containing fertilisers.
Domestic Production Capacity
While India’s domestic urea output reached a record 31.4 million tonnes in FY24, aided by six new plants commissioned by various companies including Hindustan Urvarak & Rasayan Ltd (HURL), Chambal Fertilisers & Chemicals, and Ramagundam Fertilisers & Chemicals Ltd (RFCL), raw material gaps persist. India remains entirely dependent on imports of natural gas and ammonia even for domestic manufacturing operations.
Economic and Strategic Impact
This venture is designed to insulate India from future price shocks and supply disruptions while deepening bilateral economic ties between the two nations that have strengthened cooperation in energy, defence, and agribusiness. The project could help reduce the government’s annual urea subsidy burden of Rs 2.5 lakh crore (approximately $30 billion) by ensuring more stable and predictable pricing. Officials familiar with the discussions indicate that both sides are showing “sincerity and alignment,” with negotiations progressing steadily toward the December announcement.
December Visit Significance
President Putin’s December 2025 visit to India will mark a major milestone in India-Russia economic cooperation, with the urea plant announcement expected to highlight the expanding agricultural and strategic partnership between the two nations. This will be India’s first overseas fertiliser manufacturing venture, representing a significant shift in the country’s approach to agricultural input security.
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