Diammonium phosphate, commonly known as DAP, is a water-soluble crystalline solid containing 16-46% nitrogen and 20-52% phosphorus. It is mainly used as a phosphorus fertilizer for agriculture. DAP provides both nitrogen and phosphorus for plants and is considered an important source of both nutrients. When applied to soil, the phosphate in DAP dissolves and the nitrogen is released through hydrolysis. This makes the nutrients immediately available for absorption by plant roots.
Importance of DAP in Indian Agriculture
India is one of the largest consumers of fertilizers globally, with India Diammonium Phosphate (DAP) being a key component. Phosphatic fertilizers like DAP are crucial for Indian agriculture considering the widespread phosphorus deficiency in domestic soils. DAP accounts for over 20% of the total fertilizer consumption in the country. The crop lands in states like Punjab, Haryana, Uttar Pradesh and Bihar heavily rely on DAP to boost yields. Phosphorus plays a vital role in root development, flowering, fruit setting and grain formation. Its balanced application with nitrogen and potassium has enabled self-sufficiency in foodgrain production.
Reliance on Imports
Unfortunately, India possesses very limited reserves of rock phosphate, the key raw material for producing phosphatic fertilizers. The country has to import over 85-90% of its annual domestic phosphatic fertilizer requirements. Over the last decade, around 7-8 million tonnes of DAP is imported annually, mainly from countries like Israel, Jordan and Morocco. Indian farmers' heavy subsidy-driven demand for DAP combined with limited domestic supply has made the country highly import reliant. Any disruption in imports or high international prices can severely affect domestic availability and market rates of this important crop nutrient.
Challenges in DAP Procurement
Procuring adequate volumes of DAP at reasonably stable prices from global markets has emerged as a major challenge for Indian authorities. International rock phosphate prices are inherently volatile being largely influenced by non-trade factors in the major producing countries. Freight costs also fluctuate significantly. As a result, DAP import prices paid by Indian buyers display wild swings often leading to higher outgo. Fluctuating currency exchange rates further impact the overall import bill. At times, global supplies also get tight necessitating imports at very high costs to meet India's vast needs. All this underscores the need to diversify sources and reduce import over-dependence over the long-term.
Government Initiatives
The heavy reliance on imported DAP has prompted the government to undertake various initiatives to secure domestic supplies, reduce imports and contain rising subsidy expenditure. Under 'Make in India' program, capacity additions are being pushed at existing PSU fertilizer plants. New joint venture plants with foreign collaborators are also coming online. India is also pursuing offshore mining partnerships for long-term supply of phosphate rocks. Bilateral government-level cooperation for DAP imports at stable prices is another priority area. India is also encouraging production of neutralised phosphoric acid (NPA) and other downstream phosphates in the country. While these efforts will take time to yield results at scale, they aim to gradually enhance self-reliance and moderation in DAP subsidies outgo.
To the DAP holds immense significance for Indian agriculture being a major phosphatic fertilizer used in domestic production systems. However, overwhelming import dependence due to limited indigenous supply makes the country vulnerable to external price and non-price volatility. While ensuring stable supplies remains a priority, efforts to ramp up domestic production capacity through fresh investments and collaborations seem prudent in the long-run. This will help improve self-reliance and promote sustainable usage of this crucial crop nutrient. A balanced approach combining imports with boosting domestic supply appears necessary considering India's large population and need for food security.
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