Days after India and Russia announced a Memorandum of Understanding (MoU) to establish a urea plant with a capacity of 2 million tonnes, IFFCO, India’s largest fertilizer producer, revealed intentions to form joint ventures in countries such as Sri Lanka and Senegal. The strategy aims to secure a reliable, long-term supply of essential crop nutrients amid growing challenges related to sourcing raw materials like rock phosphate and natural gas at favorable prices.
In his first media engagement since assuming the role of Managing Director in August, K.J. Patel noted on November 9, “Acquiring high-quality raw materials is increasingly challenging. This situation often requires higher costs or leads to increased financial burden. An effective solution is to establish manufacturing facilities in regions where these resources are plentiful.”
India relies heavily on imports for critical inputs such as rock phosphate and phosphoric acid for DAP (Diammonium Phosphate) production, as domestic quality of rock phosphate is inadequate. Patel highlighted the case of Morocco’s OCP group, which has ceased sales of rock phosphate to many foreign companies outside its select partners.
Industry insiders have indicated that Morocco, which holds approximately 70% of global rock phosphate reserves, imposes restrictions on foreign investments within its fertilizer sector.
Tapping Rock Phosphate
In Sri Lanka, IFFCO plans to initiate a joint venture to produce phosphoric acid, capitalizing on the country’s high-quality rock phosphate to ship back to India for DAP manufacturing—a fertilizer formula containing 18% nitrogen (N) and 46% phosphorus (P). Additionally, in Jordan, IFFCO has an existing joint venture, the Jordan India Fertiliser Company, where it intends to increase phosphoric acid production capacity from 0.5 million tonnes to 1 million tonnes.
In Senegal, IFFCO holds a minority stake in a urea plant operated by Industries Chimiques du Senegal (ICS), part of India’s Indo Rama Group. Industry experts suggest that IFFCO may need to either acquire a controlling interest in ICS or collaborate with another partner to establish a new facility for phosphoric acid sourcing.
DAP is the second most widely used fertilizer in India after urea, with annual consumption between 10 and 11 million tonnes. Of this, approximately 5 million tonnes are imported, while the remainder is produced domestically using imported rock phosphate or phosphoric acid, both of which have experienced significant price increases over the past year.
As of September 2025, the cost of imported phosphoric acid (Cost and Freight) has risen to $1,153 per tonne (a 22% increase), while rock phosphate costs have increased to $193 per tonne from $167.
Last week, Russia’s Uralchem JSC signed an MoU with three Indian companies—Indian Potash Limited (IPL), Rashtriya Chemicals and Fertilisers (RCF), and National Fertilisers Limited (NFL)—to establish a 2 million tonnes per annum urea plant in Russia, with an estimated investment of $1.2 billion (approximately ₹10,790 crore) and operations planned to commence in 2027-28.
The agreement was formalized in New Delhi between Vinay Kumar, the Indian Ambassador to Moscow, and Denis Alipov, the Russian Ambassador to India, in the presence of Indian Prime Minister Narendra Modi and Russian President Vladimir Putin.
Published on December 10, 2025.
