India’s food inflation, after remaining outside the comfort zone for nearly 20 months, has provided much needed relief to consumers as well as to policy makers in 2025. In fact, the Consumer Food Price Index (CFPI) witnessed a deflationary trend in most of the months in 2025.
But, with the disappearing high base effect, food inflation has already started rising in 2026 and stood at 3.47 per cent in February compared to 2.13 per cent in January, per the new Consumer Price Index (CPI) series with revised base year 2024.
Under such a situation, the ongoing conflict in West Asia may have potential adverse impacts on agricultural production and food inflation in the coming seasons with significant disruptions to supply chains especially of fuel and fertilizers. While the two-week ceasefire may provide some relief, the uncertainty of resolving conflicts still persists.
Supply chain disruptions
Further, even if the conflict is resolved immediately, it may take long time to fully restore supply chains to their capacity due to the substantial damages already caused. In this context, while the precise impacts of disruptions are yet to be discerned, it is imperative to understand their potential impact on domestic agricultural production for devising requisite measures to effectively tackle food inflation.
Globally, about 13 per cent of nitrogenous and 9 per cent of phosphate fertilizers are exported from the West Asia region through Strait of Hormuz, apart from about 25 per cent of seaborne crude oil prior to February 28, 2026 according UN Trade Development (UNCTAD). As a result, the disruptions in fertilizers and fuel supply chains due to the conflict can significantly impact agricultural food production globally.
Hunger threat
In this regard, the UN World Food Programme (WFP) estimated that about 45 million more people could be pushed into acute hunger if conflict extends beyond mid-2026. India’s dependence on the Gulf region for its nitrogen fertilizer is around 30-40 per cent.
In addition, nearly 60 per cent of natural gas imports, feedstock for fertilizer production, are also from this region. As a result, the conflict can significantly impact domestic agriculture production directly through fertilizers and indirectly through fuel supply disruptions and the resultant rising costs.
Direct implications
With heavy dependence on imports for raw materials and feedstock for production, domestic chemical fertilizers industry is frequently exposed to changes in international trade policies, price volatilities, geopolitical tensions, etc.
More recently in 2025, due to the change in trade policies and restrictions by major countries, global fertilizer supplies came under pressure and their prices rose by about 14 per cent, according to the Commodity Market Outlook October 2025 report by the World Bank.
Post the conflict, the fertilizer prices increased by about 26 per cent in March compared to that in February as per the World Bank Commodities Price Data (The Pink Sheet) published on April 2. India’s fertilizer subsidies have already risen sharply since 2019-20 onwards from about ₹0.8 lakh crore to ₹1.86 lakh crore in 2025-26 as per the Revised Estimate. With rising global fertilizer prices and increasing costs of feedstock, the fiscal burden of fertilizer subsidy is expected mount further high.
Organic push
Under such a scenario, while significant government efforts are underway to diversify import of chemical fertilizers and fuels from alternate sources, it is equally imperative to promote diversification towards indigenous non-chemical fertilizers like organic and bio fertilisers.
The current shortage of chemical fertilizers provides a rare opportunity to promote alternate fertilizers by scaling up their domestic production and creating awareness among farmers for their successful adoption. This will not only reduce import dependency for fertilizers but also help in shifting to sustainable agricultural production thereby minimising the harmful impacts resulting from indiscriminate use of chemical fertilisers over the few past few decades or so.
Indirect implications
Globally, benchmark crude oil prices rose by around 45 per cent and that of natural gas prices rose by about 60 per cent from February to March 2026, according to the World Bank commodity prices. The crude and gas prices are expected to remain high for long time even if the war ends soon. As a result, the pass-through of high fuel prices can have significant indirect impact on food inflation by raising the costs of energy and transportation of farm inputs and outputs.
In addition to the conflict, the report of World Meteorological Organization (WMO) indicates a high probability of developing El Niño conditions in the second half of 2026 that may result in less than normal rainfall in the coming monsoons. With nearly half of agricultural production in the country under rainfed conditions, deficit rainfall may significantly affect agricultural output in the coming seasons adding to the rise in food inflation.
Thus, there is an urgent need to devise requisite policy strategies to scale-up domestic production and use of alternative fertilizers such as organic and bio fertilizers to reduce import dependency for fertilizers. With robust rabi output, there may be enough time for devising requisite measures to tackle any shortages in food production in the coming seasons as well as to reduce the pass-through impact of rising fuel prices.
Amarender Reddy is Joint Director, Policy Support Research, ICAR-National Institute of Biotic Stress Management (ICAR-NIBSM), Raipur; Tulsi Lingareddy is Senior Economist, Sustainable Finance and Agriculture, Mumbai. Views expressed are personal
Published on April 14, 2026