New Delhi: India is accelerating a long-pending potash investment in Canada to secure fertilizer supplies amid growing concerns over disruptions triggered by the West Asia war, according to two government officials aware of the development.
The move is aimed at securing long-term supplies of muriate of potash (MOP), a key fertilizer nutrient for which India is entirely dependent on imports. The government is looking to ensure supplies from Karnalyte Resources Inc.’s Wynyard Carnallite Project in Saskatchewan, Canada. The country currently accounts for about a quarter of India’s potash imports.
State-owned Gujarat State Fertilizers and Chemicals Ltd (GSFC) had acquired a 47.73% stake in Karnalyte in phases since 2013, as part of India’s strategy to secure overseas potash assets for the farm sector, according to the officials. GSFC has invested Canadian dollar (CAD) 49.68 million in the company so far, giving India a significant strategic stake in the project, which remains at the development stage.
“The three-stage project is at a development stage now. Amid the ongoing West Asia crisis, the central government is now accelerating its investment plans in Canada to secure long-term access to potash supplies,” said the first government official cited above, requesting anonymity.
The project had stalled primarily due to financing difficulties, a sharp fall in global prices after 2013, and rising project costs. From $393 per tonne in 2013, prices crashed to $313 in 2014.
According to World Bank data, the benchmark spot price for MOP stood at about $401 per tonne in April 2026, compared with $352 per tonne a year earlier.
Karnalyte’s Wynyard Project plans Phase 1 production of 675,000 tonnes per annum of high-grade granular potash, followed by two additional phases of 750,000 tonnes each, taking total planned production capacity to 2.175 million tonnes annually.
According to the company’s public disclosures, all environmental permits for the project are in place and preliminary detailed engineering has been completed. Further development, however, depends on sustained potash prices and financing availability. The company also said it completed an updated feasibility study for the Wynyard Project in 2025.
"GSFC has been a strategic investor in the company since 2013 and currently holds 47.73% equity interest," Karnalyte Resources said in an email response.
Queries emailed to spokespersons of ministries of external affairs, chemicals and fertilizers, and Canadian High Commission remained unanswered till press time.
India’s direct MOP consumption stood at about 2.2 million tonnes in 2024-25, while imports were 3.54 million tonnes, with the balance used in the production of complex fertilizers such as NP and NPK. Four countries account for more than 90% of India’s potash imports—Russia (51%), Canada (25%), Israel (8%) and Jordan (8%). Following the Iran crisis, India’s MOP imports for the kharif season reached 383,000 tonnes till 27 May.
For 2025-26, MOP demand is estimated at around 1.73 million tonnes, according to a reply by minister of state for chemicals and fertilizers Anupriya Patel in the Lok Sabha on 2 December 2025.
The renewed push comes as India’s fertilizer subsidy burden remains elevated due to volatile global nutrient prices and currency pressures. The subsidy bill crossed ₹2.17 trillion in FY26. The budget allocation for FY27 stands at ₹1.71 trillion, though officials and industry executives expect it to rise by around 20% if the West Asia war continues to disrupt supplies through the Strait of Hormuz and global fertilizer prices jump.
Fertilizer subsidy remains one of the largest components of the Centre’s support to the farm sector, cushioning farmers from price shocks but exerting sustained pressure on public finances.
With India seeking to reduce dependence on a handful of countries for critical fertilizer inputs, experts said expanding sourcing partnerships could strengthen supply security and support long-term agricultural demand.
According to a policy brief released by think tank Indian Council for Research on International Economic Relations (ICRIER) in March 2026, nearly 69% of India's fertilizer value chain depends on foreign sources, making diversification of supply chains critical for ensuring nutrient security.
“The government is diversifying import sources for urea, LNG, raw materials and finished fertilizer products…We are already importing potash from Canada, and this will definitely help in meeting our requirements,” said Sachchida Nand, former additional director general at the Fertilizer Association of India (FAI) and visiting professor at ICRIER.