From the Editor-in-Chief
The Iran war has just shown, at considerable national cost, what happens when foundational questions about food and energy security are deferred indefinitely
A stark imbalance plagues India’s farm sector. We are super-abundant in rice and wheat. We even clinched the world’s top rank for paddy in January. State warehouses are overflowing many times over target. After running a food welfare programme for 800 million people, we still have enough to be among the top net exporters and still divert some to ethanol. Yet there is an obverse side to this bountifulness. In pulses, India’s staple protein, demand outstrips supply. We import 15-20 per cent of our needs. With edible oils, import dependence reaches a staggering 56 per cent. Fertilisers reveal an equally troubling vulnerability. We import 21 per cent of our urea, 60 per cent of other crop nutrients. India does make its own urea, but the catch is, 85-90 per cent of its material inputs and 80 per cent of its liquified natural gas (LNG) feedstock is imported. Three quarters of that came from the Gulf before the war.
That conflict may have ended or may start again, but it places foundational questions before India. Can we claim self-reliance in food if our farms are at the mercy of such mercurial events? More concretely, what does this dependency wreak upon the economy? We are literally eating our foreign exchange. In FY26, edible oils, pulses and the fertiliser basket, including LNG, totted up a cumulative import bill of $51 billion (Rs 4.5 lakh crore), 5.2 per cent of our import bill. In FY27, this will likely swell to $56 billion (Rs 5.3 lakh crore). At first glance, it may seem like unavoidable expenses. But as our cover story demonstrates, much of the burden is the consequence of policy choices made over decades.
The Iran war made that cost visible in a way that comfortable times conceal. On February 27, the eve of war, India’s forex kitty was sitting at a historic high of $728.49 billion (Rs 69 lakh crore), enough to fund 11 months of imports. Then the conflict sent all calculations awry. The energy bill spiked. So did shipping freight. The rupee slipped to 96 a dollar as panicky Foreign Portfolio Investors pulled out $30 billion (Rs 2.85 lakh crore) between March and now. The current account deficit, which looked manageable, came under pressure. FY26 ended with a $30.8 billion (Rs 2.9 lakh crore) balance of payments deficit. April careened into another $6.6 billion (Rs 62,700 crore) deficit. On all counts, India had to burn through the dollar reserves it had spent years accumulating. The season of panic held up a harsh mirror. With the rupee also at historic lows, it added to the pain. What it showed, among other things, was the built-in profligacy of our farm imports. Prime Minister Narendra Modi flagged that in his May 10 austerity appeal to Indians, putting a 10 per cent cut in edible oil consumption in the same bracket as giving up gold and foreign travel.
An average Indian consumes 24 kg of edible oil in a year, double the medically recommended limit. The fertiliser story is equally revealing. A bag of urea, since 2018, has cost Rs 242. It costs 10 times more to produce. Other crop nutrients show the same abnormal skew. The exchequer absorbs the 90 per cent shortfall, paying off manufacturers through a complex mechanism that cost Rs 2.11 lakh crore in FY26. Artificially cheap urea, meanwhile, turns farm soil sterile all around as farmers stay addicted to paddy and wheat, the two crops with guaranteed procurement at a Minimum Support Price (MSP). Pulses and oilseeds, which could reduce our import dependency, remain risky propositions that farmers rationally avoid. The policy is eating itself.
The solutions exist and are not a mystery. Start fertiliser reform by making more at home: pursue coal-based urea, as at the much-delayed Talcher plant in Odisha, like an essential commodity; expand, modernise our fleet of gas-based urea plants. Diversify imports: for finished urea, tap Russia, Morocco, Australia, Canada. On LNG, play the geopolitics intelligently. The cheapest LNG lies next door in Iran. PM-PRANAM’s excellently timed push for organic nutrients has already helped a 3.5-fold jump in sales to 1.1 MT this kharif season. That momentum needs to be maximised rather than treated as just a nice programme. On pulses, make protein security vital to Green Revolution 2.0. Unclog the lab-to-market pipeline for better seeds. Expand acreage through intercropping, which requires no new land and can unlock millions of hectares with the right district oversight. And reform the fertiliser subsidy structure to channel targeted support that reaches small, marginal and tenant farmers rather than disappearing into a leaky mechanism that serves everyone imperfectly.
Fertiliser reform is politically treacherous. Redirecting MSP support towards pulses and oilseeds will face resistance from vested interests. The Iran war has just shown, at considerable national cost, what happens when foundational questions about food and energy security are deferred indefinitely. There will be another crisis. There always is. The question is whether India uses this one to build genuine resilience or wait for the next shock to ask the same questions again.
Sixty years ago, India came out of the last of its great famines. The Green Revolution did its job. Now, its policy legacy is undermining the food security it created. There is no better time than now for the Modi government to push reform. The ground is ready. If done, the country will reap a rich harvest in the future and he’ll be remembered for it.
A stark imbalance plagues India’s farm sector. We are super-abundant in rice and wheat. We even clinched the world’s top rank for paddy in January. State warehouses are overflowing many times over target. After running a food welfare programme for 800 million people, we still have enough to be among the top net exporters and still divert some to ethanol. Yet there is an obverse side to this bountifulness. In pulses, India’s staple protein, demand outstrips supply. We import 15-20 per cent of our needs. With edible oils, import dependence reaches a staggering 56 per cent. Fertilisers reveal an equally troubling vulnerability. We import 21 per cent of our urea, 60 per cent of other crop nutrients. India does make its own urea, but the catch is, 85-90 per cent of its material inputs and 80 per cent of its liquified natural gas (LNG) feedstock is imported. Three quarters of that came from the Gulf before the war.
That conflict may have ended or may start again, but it places foundational questions before India. Can we claim self-reliance in food if our farms are at the mercy of such mercurial events? More concretely, what does this dependency wreak upon the economy? We are literally eating our foreign exchange. In FY26, edible oils, pulses and the fertiliser basket, including LNG, totted up a cumulative import bill of $51 billion (Rs 4.5 lakh crore), 5.2 per cent of our import bill. In FY27, this will likely swell to $56 billion (Rs 5.3 lakh crore). At first glance, it may seem like unavoidable expenses. But as our cover story demonstrates, much of the burden is the consequence of policy choices made over decades.
The Iran war made that cost visible in a way that comfortable times conceal. On February 27, the eve of war, India’s forex kitty was sitting at a historic high of $728.49 billion (Rs 69 lakh crore), enough to fund 11 months of imports. Then the conflict sent all calculations awry. The energy bill spiked. So did shipping freight. The rupee slipped to 96 a dollar as panicky Foreign Portfolio Investors pulled out $30 billion (Rs 2.85 lakh crore) between March and now. The current account deficit, which looked manageable, came under pressure. FY26 ended with a $30.8 billion (Rs 2.9 lakh crore) balance of payments deficit. April careened into another $6.6 billion (Rs 62,700 crore) deficit. On all counts, India had to burn through the dollar reserves it had spent years accumulating. The season of panic held up a harsh mirror. With the rupee also at historic lows, it added to the pain. What it showed, among other things, was the built-in profligacy of our farm imports. Prime Minister Narendra Modi flagged that in his May 10 austerity appeal to Indians, putting a 10 per cent cut in edible oil consumption in the same bracket as giving up gold and foreign travel.
An average Indian consumes 24 kg of edible oil in a year, double the medically recommended limit. The fertiliser story is equally revealing. A bag of urea, since 2018, has cost Rs 242. It costs 10 times more to produce. Other crop nutrients show the same abnormal skew. The exchequer absorbs the 90 per cent shortfall, paying off manufacturers through a complex mechanism that cost Rs 2.11 lakh crore in FY26. Artificially cheap urea, meanwhile, turns farm soil sterile all around as farmers stay addicted to paddy and wheat, the two crops with guaranteed procurement at a Minimum Support Price (MSP). Pulses and oilseeds, which could reduce our import dependency, remain risky propositions that farmers rationally avoid. The policy is eating itself.
The solutions exist and are not a mystery. Start fertiliser reform by making more at home: pursue coal-based urea, as at the much-delayed Talcher plant in Odisha, like an essential commodity; expand, modernise our fleet of gas-based urea plants. Diversify imports: for finished urea, tap Russia, Morocco, Australia, Canada. On LNG, play the geopolitics intelligently. The cheapest LNG lies next door in Iran. PM-PRANAM’s excellently timed push for organic nutrients has already helped a 3.5-fold jump in sales to 1.1 MT this kharif season. That momentum needs to be maximised rather than treated as just a nice programme. On pulses, make protein security vital to Green Revolution 2.0. Unclog the lab-to-market pipeline for better seeds. Expand acreage through intercropping, which requires no new land and can unlock millions of hectares with the right district oversight. And reform the fertiliser subsidy structure to channel targeted support that reaches small, marginal and tenant farmers rather than disappearing into a leaky mechanism that serves everyone imperfectly.
Fertiliser reform is politically treacherous. Redirecting MSP support towards pulses and oilseeds will face resistance from vested interests. The Iran war has just shown, at considerable national cost, what happens when foundational questions about food and energy security are deferred indefinitely. There will be another crisis. There always is. The question is whether India uses this one to build genuine resilience or wait for the next shock to ask the same questions again.
Sixty years ago, India came out of the last of its great famines. The Green Revolution did its job. Now, its policy legacy is undermining the food security it created. There is no better time than now for the Modi government to push reform. The ground is ready. If done, the country will reap a rich harvest in the future and he’ll be remembered for it.
