Big sign of easing tensions! China has relaxed restrictions on urea exports to India, signalling an improvement in diplomatic relations between the two Asian countries, particularly as both face trade challenges from US President Donald Trump’s administration.India, which leads global urea imports, is expected to receive approximately 300,000 tons, sources told Bloomberg. China, traditionally a significant urea exporter, had previously limited its overseas sales of this nitrogen-based fertiliser in recent years.This Chinese policy shift follows Trump’s recent trade actions, specifically the doubling of tariffs to 50% on Indian products as a consequence of New Delhi’s Russian oil purchases, which has contributed to strengthening China-India relations.Also Read | First time since 2021! Faced with EU sanctions on Russia oil, India’s Nayara Energy ships diesel cargo to ChinaRelations between India and China deteriorated significantly in 2020 following border confrontations. India has now lifted restrictions on tourist visas for Chinese citizens, and there are prospects of Prime Minister Narendra Modi and Chinese President Xi Jinping meeting during a summit in Tianjin beginning on August 31.
India-China trade dynamics
Nearly half of China’s urea exports were destined for India in 2023. However, exports to all destinations stopped last year. Whilst Beijing eased restrictions in June, it maintained specific limitations on India until now.The trade flow, although currently modest, has the potential to expand substantially, potentially alleviating global supply constraints and reducing elevated prices.India’s urea imports declined by approximately 20% to 5.7 million tonnes during the fiscal year that concluded on March 31, as reported by the Fertiliser Association of India. The organisation noted that purchases from China decreased to roughly 100,000 tonnes in 2024-25, a significant reduction from 1.87 million tonnes in the previous year.India’s substantial agricultural sector and its domestic production shortfall necessitate considerable imports to ensure consistent fertiliser availability for farmers. The country maintains significant subsidies on urea, as this essential soil nutrient plays a vital role in enhancing the productivity of principal crops.Also Read | Trump’s ‘critical’ move on Pakistan? US step on BLA may aim at America mining rare earths; how will China react?
