Fertilizer production in India fell to a five-year low in March, reflecting input shortages caused by the ongoing war in West Asia, even as the combined index of eight core industries (also called the core sector index) declined 0.4% on an annual basis, the weakest reading since August 2024 when it had declined 1.5%.
Data released by the Ministry of Commerce and Industry on Monday showed that if fertilizers were excluded from the index – they have just 2.63% weightage – the overall index would have remained flat instead of contracting.
The March contraction in the index was driven by four sectors: fertilizers, crude oil, coal and power.
Fertilizer production declined 24.6% from a year earlier, the sharpest decline so far among the eight industries.
In absolute terms, the fertilizer production index came in at 95.7 in March 2026, the lowest value since April 2021, when it came in at 88.3.
The base sector index for 2011-12 is 100.
To make the new crop season disruption-free, the Indian economy will need to either ease the supply-chain crisis or import fertilizer supplies to compensate for the loss of domestic production.
According to the latest Economic Survey data, India imports about 27% of its total fertilizer consumption.
Certainly, recent developments suggest that the worst of the supply shock to India’s fertilizer industry is over.
HT reported on April 9 that “Natural gas supplies to fertilizer plants have again been increased from 90% to 95% of their requirement… the second increase in a week” after a previous increase from “70% to 90%”.
Natural gas is both a fuel and feedstock for fertilizer plants. To avoid any disruption in the supply of PNG (piped natural gas) and CNG (compressed natural gas) for cooking and automobiles, its supply had to be reduced.
When read with the fact that March production data showed a decline of about 25%, which is roughly in line with the temporary 30% reduction in natural gas supplies to fertilizer plants, an increase in gas supplies in April should help revive production.
Among other sectors in the core sector index, coal production fell 4%, crude oil production declined 5.7%, and electricity production fell 0.5%.
Steel and cement continued to expand, but both slowed sharply from February.
Steel output rose 2.2% in March, down from 7.6% in February, while cement output rose 4% compared with an 8.9% increase a month earlier.
The final growth rate for the February index was revised to 2.8%, while the cumulative growth in fiscal year 2025-26 was 2.6%.
