Diammonium phosphate, or DAP, is one of the most widely used phosphatic fertilizers in India, and it has been playing a very important role in the early stages of crop development in both kharif and rabi seasons. As explained in the India Diammonium Phosphate (DAP) Market analysis by Coherent Market Insights, the demand for DAP in India has a very strong seasonal pattern, which is in sync with the sowing season. However, what appears to be a strong demand pattern has a very weak supply chain structure, which is dominated by high import dependence and international prices of phosphates.
India’s Structural Reliance on Imports
India has its own domestic stock of rock phosphate, which is the key raw material used in the production of phosphatic fertilizers. This has led to India’s heavy dependence on imports of DAP as well as key intermediates such as phosphoric acid and ammonia. A large portion of India’s DAP requirements is fulfilled by global suppliers in West Asia, North Africa, and East Asia.
This makes the country’s import dependence a structural issue in the supply side, particularly during peak seasons. DAP is primarily used as a basal fertilizer during the time of planting. This leads to an increase in the demand for DAP prior to the kharif and rabi seasons. Any disruption in the import chain, due to geopolitical tensions, export restrictions imposed by the exporting countries, or logistical problems, can easily lead to a shortage situation at the state and district levels.
Impact of Global Phosphate Price Volatility
The international prices of phosphate fertilizers are affected by several factors, such as the availability of raw materials, the cost of energy, the cost of transportation, and trade policies. In the past few years, the international prices of DAP have been highly volatile due to the shortage of supplies from the major exporting countries, the rise in the cost of raw materials, and geopolitical tensions.
In the Indian scenario, the rise in the international prices of phosphate fertilizers has a direct effect on the price of imported DAP. Although the government safeguards the farmer from the risks of prices through the provision of fertilizer subsidies, the increase in international prices significantly increases the subsidy amount. During times of continuous price inflation, the number of purchases can be postponed, purchases can reduce, or the time of delivery can be extended, thus increasing the risks associated with the supply chain during peak sowing seasons.
Policy Interventions and Strategic Responses
In an attempt to mitigate the supply-side issues posed by import dependence and global price volatility, the Indian government has increasingly resorted to proactive measures such as advance import plans, long-term supply agreements, and advance allocation of fertilizers prior to the crucial sowing periods. Advance notices regarding subsidy allocations are critical to mitigating global price volatility in the fertilizer supply chain in India.
In January 2025, the Government of India’s Cabinet approved an additional subsidy of around USD 419 million (₹3,850 crore) to facilitate the distribution of di-ammonium phosphate (DAP) and phosphatic fertilizers to farmers at lower prices. The subsidy package was in addition to the existing Nutrient-Based Subsidy (NBS) policy, which assisted in countering the rise in the cost of inputs globally. The subsidy package was aimed at ensuring fertilizer price stability as the country approached a crucial kharif and rabi season.
(Source: Budget Express 2026)
Conclusion
India’s DAP supply dynamics are influenced by the interplay of import dependence, international volatility of phosphate prices, and highly seasonal demand patterns. Although the cropping patterns determine the peak periods of demand, the international market trends determine the reliability of meeting such demands. Improving the resilience of the supply side through diversification of sources, effective policy implementation, and increasing domestic capacities will remain important for ensuring stable DAP supplies in the changing Indian agricultural scenario.
For a deeper market perspective, check out the India Diammonium Phosphate (DAP) Market analysis by Coherent Market Insights.
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