Hormuz: India’s nitrogen supply chokepoint

The Strait of Hormuz is a key global shipping route not only for crude oil but also for natural gas used in fertilizer production. India imports large volumes of LNG from Qatar, which is a major supplier of gas used to produce urea and other nitrogen fertilizers. Most LNG shipments from Qatar and the Gulf must pass through the Strait of Hormuz, which had been shutdown

Around 54% of India’s LNG imports pass through the Strait of Hormuz

•India imports 45% of its natural gas needs, much of it via LNG shipments through this route.

•Natural gas is the primary feedstock for ammonia, which is used to make nitrogen fertilizers such as Urea.

Implication: Hormuz is not just an oil chokepoint, it is a fertilizer feedstock chokepoint

Qatar Gas: India’s Fertilizer Production

•Qatar supplies 39–40% of India’s LNG imports.

•Over 90% of Qatar’s LNG exports pass through Hormuz, making shipments highly route-dependent.

•Around 60% of LNG used in India’s urea production comes from Qatar.

•India imported 27 million tonnes of LNG in FY25, about half of its total gas consumption.

Implication: A disruption at Hormuz can directly affect fertilizer plants, not just fuel supply

Fertilizer System Dependence on Gas

•India’s annual urea demand: 38.8 million tonnes

•30 out of 32 urea plants run on natural gas as feedstock

•Domestic production meets ~87% of demand, but the gas used is partly imported

•India also imported 8 million tonnes of urea during Apr–Dec 2025.

Implication: Even “domestic” fertilizer production contains imported gas risk

Fiscal Impact for India

•India spends`1.5–1.8 lakh crore annually on fertilizer subsidies (largest subsidy after food)

•Urea accounts for ~65–70% of the subsidy bill due to price controls

•Gas price spikes from Hormuz disruptions raise subsidy costs sharply