India is facing a potential crisis in its agricultural sector as China has reportedly halted shipments of specialty fertilizers to India for the past two months. This disruption adds to a growing list of unofficial trade restrictions between the two countries, which have also affected rare-earth magnets and tunnel boring machines.

Specialty fertilizers, including water-soluble, slow-release, micronutrient, and other high-value fertilizers, are crucial for fruit, vegetable, and horticulture crops. India imports approximately 80% of its specialty fertilizers from China, making this halt a significant concern for Indian agriculture. According to Rajib Chakraborty, president of the Soluble Fertilizer Industry Association (SFIA), China has been restricting suppliers of specialty fertilizers to India for the last four to five years, but this time it is a complete halt.

The timing of this disruption is particularly concerning as it coincides with the June to December planting season, during which India typically imports around 150,000 to 160,000 tonnes of these fertilizers. The halt in supply could therefore impact crop yields during this crucial period.

The reasons behind China's actions remain unclear. While there is no official ban, shipments to India have stalled due to a lack of clearance from Chinese authorities. Some reports suggest that inspections and procedural delays are being used as a barrier to export, similar to earlier restrictions on rare earths and magnets. This has led to speculation that China may be using economic pressure to express its displeasure with certain Indian policies.

The Indian government is reportedly aware of the situation and may take up the matter with China if necessary. In the meantime, India is exploring alternate sources for specialty fertilizers, such as Jordan and Europe. However, delays in securing supplies from these sources remain a concern.

To counter China's trade provocations, the Indian government has imposed anti-dumping duties on six critical chemical imports. These tariffs, which will remain in place for the next five years, target key sectors such as herbicide production, pharma manufacturing, and tyre manufacturing.

The situation highlights India's dependence on China for key agricultural inputs and the vulnerability of its supply chains to geopolitical tensions. It also underscores the need for India to develop its domestic manufacturing capacity and diversify its sources of supply. Addressing internal regulatory challenges could help mitigate future risks and foster self-reliance in this critical sector.