An Overview of Fertilizers Consumption in India:Determinants and Outlook for 2020-A Review

Plants nutrients supply from the chemical fertilizer is the key to increasing agriculture production by enhancing the land productivity. However, the demand-supply gap of fertilizers in India has increased in recent times, thereby leading to increased dependency on imports. India imports which were about 2 million tonnes in early parts of 2000 increased to 10.2 million tonnes of fertilizers in 2008-09.In view of importance of fertilizers in agriculture growth and the possibility of an emerging demand-supply gap, there is need to forecast future demand. The paper begins with an overview of fertilizer consumption trends and then identifies important determined of fertilizers in India in 2020-21. India is the second largest consumption in the world after China, consuming about 26.5 million tonnes. However, average intensity of fertilizer use in India remains much lower than most countries in the world but is highly skewed with wide inter-regional, inter-state and inter-district variations. The results show that non-price factors such as irrigation, high yielding varieties were more important than price factors in influencing demand for fertilizers. Of the two price policy instruments, affordable fertilizers prices and higher agricultural commodity prices, the former is more powerful in influencing fertilizer demand. The paper suggested that in order to ensure self-sufficiency in agricultural production in the country, availability of fertilizers at affordable prices should be prioritized over higher output prices. By 2020 fertilizer demands in the country is projected to increase to about 4106 million tones and is expected to grow at a faster rate in eastern and southern region compared with north and west. To meet the increasing fertilizer requirement of the country a conducive and stable policy environment availability of raw materials capital resources and price incentives will play a critical role.