New Delhi and Riyadh finalized agreements for the annual supply of 3.1 million metric tons of diammonium phosphate (DAP) fertilizer, a move Indian officials say is intended to bolster food security and reduce reliance on Chinese imports. The agreements, signed between Saudi mining company Ma’aden and Indian firms IPL, KRIBHCO, and CIL, will extend for five years with a potential renewal for another five, according to a statement released during a visit by India’s Minister for Fertilisers and Chemicals, J.P. Nadda, to Saudi Arabia.
The deal represents a “substantial increase” in DAP availability for India, a critical component for agricultural yields, particularly as the country seeks to lessen its dependence on China for fertilizer supplies. A source within the Indian government, speaking anonymously, indicated the agreements were made at a time when some nations were exhibiting “restrictive approaches” to fertilizer exports, and highlighted Riyadh’s commitment to meeting India’s needs. China previously supplied over 2.2 million metric tons of DAP to India before the Rabi season, according to recent reports.
The move comes as Saudi Arabia and China have deepened their strategic partnership in recent years, particularly since King Salman’s ascension to the throne in 2015. China brokered a deal in March 2023 to restore diplomatic relations between Saudi Arabia and Iran, signaling increased political influence in the Middle East. This partnership has been largely driven by aligning China’s Belt and Road Initiative with Saudi Arabia’s Vision 2030 development program, focusing on energy and economic ties. However, the new agreements with India appear to be a deliberate effort to diversify supply chains and strengthen bilateral relations.
Indian officials stated that discussions during Nadda’s visit also encompassed broadening cooperation to include urea, alongside DAP, and exploring potential investments by Indian public sector undertakings in Saudi Arabia’s fertilizer sector, with reciprocal Saudi investments in India. The expanding strategic partnership between India and Saudi Arabia follows a state visit by Prime Minister Modi to Jeddah in April, underscoring a growing alignment of interests. The partnership is framed by both nations as a move towards a multipolar global future, rooted in strategic autonomy and economic pragmatism.
While the agreements focus on fertilizer, they occur within a broader context of increasing Saudi oil exports to India. Recent reports indicate a surge in Saudi oil shipments to India, reaching levels not seen in six years, alongside increased exports to China with price reductions to levels not seen since 2020. The implications of these shifting energy dynamics and fertilizer supply agreements remain to be seen, as both India and Saudi Arabia navigate a complex geopolitical landscape.
