From Abundance to Absence: How China Triggered a DAP Fertilizer Squeeze and How India Adapted?

A ban on the exports of DAP fertilizer by the Chinese uncertainly affected the supply of this fertilizer in India and also raised its prices causing changes in adaptation among the Indian farmers, the industry, and policymakers.

The Indian agriculture sector has been dependent on chemical fertilizers especially Di-Ammonium Phosphate (DAP) in order to obtain maximum harvest. DAP is important  during the major crop sowing like wheat, pulses, rice and so on. In the past, India could only rely on external suppliers in order to satisfy its increasing demand of the key input, whereby China has in the recent years emerged as the largest exporter. But, in a twist of fate, China, which was the biggest supplier of DAP imports to India is now a fraction of its previous number on the basis that it has internal interests that include increased use in the industrial sector. This has left the Indian market short of supply creating rippling along the agriculture value chain that have increased the price of procurement and left the farmers along with the fertilizer makers in an even more vulnerable position. However, instead of being a tale of crisis it has triggered quick adjustment. Indian policy-makers, manufacturers and farmers have fought back out of a mixture of alternative sourcing, local production and on-ground innovation. This article discusses the causes and consequences of the supply squeeze, as well as pointing to the many sources of strength and innovation that were created during the squeeze. It is also a very relevant case study on the geopolitics of agri inputs and the vital need to have self-reliant and sustainable supply chain.

The Role of DAP in India Agriculture

Di-Ammonium Phosphate (DAP) is the epitome of phosphorus fertilizer strategy in India and has been extensively popular in the country due to its nutrient efficiency and the fact that they are easy to dispense.

Activation and Agronomic Significance
DAP is considered one of the phosphorus-concentrated fertilizers. It is water soluble and this gives it the capacity to be easily absorbed and early root development is achieved, as well as other plant vigour. This would be very important, especially in crops such as wheat, rice, cotton, and maize during the early stage of sowing, where yield results are determined by root establishment.

Farming Practices and Seasonal Applications
This is mostly applied when one is sowing before the Rabi and Kharif seasons. It has the granular form, which makes it easy to place it with seeds so that less nutrient is lost. DAP is not only a fertilizer for millions of Indian farmers, particularly in regions that have limited resources, but also a strategic instrument for maximizing productivity.

Habits of consumption and regional dependence
India is the second-largest user of DAP. Punjab, Haryana, Uttar Pradesh, and Andhra Pradesh are the highest consumers because of the intensive cultivation patterns, nutrient-imbalanced soils with phosphorus deficiency. The popularity of the fertilizer has been on the rise ever since its supply chain and government subsidies enabled people to access it faster.

Dependency between Global Supply Chains
A greater than 60 percent of the DAP demand requirement is imported in India and this makes food security in India dependent on international fertilizer markets. Such reliance highlights the strategic value of DAP as a source of nutrients but also as a multiplier in the geopolitics and economics of Indian agriculture.

The Chinese superiority

China has been a strategic and dominant actor in the worldwide Di-Ammonium Phosphate (DAP) supply chain systems, affecting fertilizer markets in terms of scale and power that is dictated by prices and geopolitical bargaining.

Large Scale of Manufacture and Export Capability
China can be described as the leader in the world in the production and exportation of phosphate-based fertilisers, including DAP. The country had vast deposits of phosphate rocks and industrial policies sponsored by the state allowed them to produce DAP at affordable prices and huge quantities.

Strategic Trade Positioning
The logistical and economic advantage of China over other suppliers was determined by the fact that China was geographically close to India, has efficient port infrastructure, and has a week-long production. Chinese DAP was cheaper in comparison to Indian on freight rates and delivery schedules and thus it was considered as a good source during the main sowing period.

Global Supply Chain integration
The dominance in DAP is similar to its overall strategy in important supply chains in China, such as rare earth, EV battery components. The power of controlling global markets by means of export controls or controlling prices of influence has made nations such as India susceptible to shock or sudden supply disruptions as was the case with Chinese DAP departures in early 2025.

Implications for Indian
The dependency of India on Chinese DAP revealed a weakness in the structural levels of its fertilizer security. The immediate decrease in imports in a single year created excess stress. This break highlighted the dangers of extreme reliance on one provider and instigated dire moves towards diversification.

The Sudden Export Squeeze

The shock that rattled the fertilizer industry in India in 2025 was the sudden stoppage of Di-Ammonium Phosphate (DAP) exports by China at the beginning of 2025 resulting in a chain-effect in the supply chain and its impact on pricing.

• An Altered Decline: Even in China, the DAP trade with India has been reducing, with the 22.9 lakh tonnes in the 2023-24 turning into meager 8.4 lakh tonnes in the 2024-25. As of January 2025, however, not a single tonne had been received. Although no official export ban had occurred, the Chinese customs withheld clearances and this type of frozen outbound shipments by Chinese authorities.
• Why it happened: The non-official restrictions were explained by the desire of China to place the focus of domestic agricultural demands and shift the supply of phosphates to the areas of high development, such as the production of electric vehicle (EV) batteries. The two pressure points food security and industrial policy, restructured the export calculus of China.
• The international Fallout: This shocking chaos created a strained situation in the global phosphates markets that pushed up the DAP prices in the middle of 2024 between 515 and 525 tonnes to a range that exceeded 810 tonnes within the same period in 2025. In the case of India, which over-depends on supplying the country with fertilizers, disruption revealed the vulnerability of its fertilizer security and the need to diversify the sources of supply.

The Effect on India's Fertilizer Industry

Any changes experienced by China in late 2024, a sudden exodus in the Di-Ammonium Phosphate (DAP) export market in the early months of 2025, created a sense of shock in the Indian fertilizer business environment, revealing shortages in the supply chain and price dynamics.

Declining Inventory and lack of supply
DAP opening stocks in India of the 2025 kharif have reduced to 12.4 lakh tonnes, this was against 21.6 lt in 2024 and 33.2 lt in 2023. As the export of China dropped down to 22.9 lt in 2023-24 to zero in 2025, Indian importers were scrambling to take over the shortage. Non-Chinese suppliers, such as Jordan, Morocco and Saudi Arabia, were activated, but none of them could compete with China in scale and speed.

Price boom and market volatility
The international phosphate markets were constricted by a sudden supply stranglehold. Prices of imported DAP jumped to $515-525 dollars per tonne in the middle of 2024, to above 810 dollars in the middle of 2025. When fertilizer prices rose to this level, the margins of fertilizing companies were stretched and the subsidy bill of governments inflated because they capped the retail price of fertilizer in order to cushion farmers.

Strained Domestic Output
Within India, the increased production of DAP was subject to bottlenecks in production as there were constraints on the availability of phosphoric acid. Prices of this important input were also escalating as parties tried to negotiate their prices. The subject industry's reliance on foreign raw materials necessitated the option of integrating upstream and investing in local phosphate deposits.

Strategic Transgression and policy Response
Contributing to that, the government acted faster to widen the sources of imports and increase long-term contracts with suppliers other than Chinese. This was focused on strategic stockpiling, subsidy Readjustment, and assistance to local production. Nutrient-use efficiency and the move toward specialty and bio-based fertilizers were topics also put forward by the crisis.

The ways Farmers are Surviving

The abrupt cut in supply of DAP has put Indian farmers, particularly the small-scale ones, under some level of stress. However, they have reacted in a resilient, improvised, and flexible manner.

A Changeover to Alternative Fertilizers
As DAP has now become in short supply or prohibitively expensive, most farmers resort to using complicated fertilizers with nitrogen, phosphorus and potassium (NPK), or to organic sources that are locally available, such as compost and vermicompost. Although this move has not been so ideal in nutrient balance, it has assisted in the preservation of soil fertility and crop viability.

Sowing and Crop Selection
In such areas, a farmer has resorted to planting crops that need less phosphorus or have high tolerance to nutrient stress, such as in Haryana and Uttar Pradesh. Others have even lowered the levels of application of DAP, utilising residual soil nutrients or protracted fertilization to extend scarce resources.

Extension Services and Cooperatives' Role
Cooperative societies and agricultural extension officers have been very significant in recommending suitable nutrient management strategies to farmers and evenly allocating the available DAP stocks. In other districts, the invention of digital systems monitored inventory and halo stasis.

Policy and Industry Response

The urgency of DAP supply crisis generated an immediate response both by industry players, as well as by policymakers to stabilize the supply both in the short and medium term and create long-term resilience within India fertilizer ecosystem.

Increasing production
The manufacturers of fertilizers had increased domestic production of DAP by acquiring phosphoric acid through other suppliers, such as Morocco and Jordan. There was the encouragement of joint ventures and long-term procurement contracts to stabilise the input stream. Other companies even attempted backward integrations, which were to take them into phosphate rock mining so as to minimize the susceptibility to raw materials.

Policy changes
The adjustment of fertilizer subsidies shocked the government to absorb the increment in international prices and cushion farmers against the shock of retail prices. At the same time, it also imported more varieties of origin of imports thus increasing its purchasing of goods in Saudi Arabia, Russia and Tunisia. Prepositioning of food stocks toward the kharif was started to smooth against future shocks.

Innovation and Self-Reliance
In accordance with the pursuance of Atmanirbhar Bharat plans, the policy was directed to the encouragement of in-country manufacturing of specialty fertilizers and those that are bio-based. It established research grants and pilot programs to promote nutrient-use efficiency and limit excessive use of conventional DAP.

Geopolitical Implications Strategic Implications

This supply squeeze in DAP by Chinese, which has caused chaos in its ability to import fertilizers, has highlighted the vulnerability of strategic dependence in India due to the importation of agricultural products.

The use of fertilizer
Informally preventing DAP exports, China provided an example of how the strategic use of the most essential commodities could be utilised as an instrument of the geopolitical influence. This action was more reminiscent of this approach in other industries such as rare earths and pharmaceuticals, and this further supports the argument that India needs to evaluate its single-source vulnerabilities.

Strategic independence
This is the strategic autonomy included in the policies of India, which includes diversification of importation sources, long term contracts and increasing the production domestically. The crisis has also stepped up the pace of attempts to shield the core sectors against external shocks, in keeping with the Atmanirbhar Bharat idea envisaged in India.

World Trade and Diplomacy
The episode emphasizes the greatness of strong supply chain networks and multilateralism. It can be seen that in the future, India would perhaps have an interest in developing a dependence on regional partnerships and incorporating trade agreements in fertilizers to enhance future profitability in the light of the fact that future conflicts-whether in the Red Sea or Eastern Hemisphere would still hamper crucial imports.

Conclusion