India, Russia Plan to Set Up USD2B Urea Production Facility

(MENAFN) India and Russia are moving forward with a $2 billion joint venture to construct a urea production facility in Russia, as New Delhi scrambles to secure fertilizer supplies disrupted by the Middle East conflict, media reported.

The proposed plant — a partnership between Russia's Uralchem and Indian state-owned firms Indian Potash, Rashtriya Chemicals and Fertilizers, and National Fertilizers — is slated to be built in Togliatti, Russia, with a targeted annual output of 2 million tons of urea.

"The urea plant should be ready within the next two years," Indian Potash Managing Director PS Gahlaut told media.

Gahlaut confirmed that state-owned Projects & Development India, appointed as consultant for the venture, submitted a pre-feasibility report last week. Indian Potash, Rashtriya Chemicals and Fertilizers, and National Fertilizers "are expected to take a call on the pre-feasibility report soon," he added. Once operational, Gahlaut said the facility would serve as a guaranteed and stable supply source for India.

Supply Crunch Forces Costly Imports
The announcement comes as India faces mounting pressure on fertilizer availability. On April 23, Reuters reported that New Delhi has agreed to import urea at double the price paid earlier this year, a direct consequence of supply disruptions stemming from the Middle East conflict. Indian Potash has committed to purchasing 2.5 million tons of urea — nearly a quarter of India's total annual imports of approximately 10 million tons recorded in 2025.

As the world's largest urea importer, India's exposure to supply shocks is structural. The country's domestic urea production is heavily dependent on natural gas, the bulk of which is sourced from the Middle East. Rating agency ICRA projects that India's reliance on urea imports will climb to around 30% of total consumption by 2030.

To cushion against the deepening shortfall — compounded further by China's announcement of export restrictions ahead of the summer planting season — New Delhi is actively pursuing expanded fertilizer imports from Russia, Belarus, and Morocco.

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