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By Vladimir Soldatkin
NEW DELHI, Oct 5 (Reuters) - Russia’s Phosagro has struck a deal to supply 2 million tonnes of fertiliser worth $1 billion to India by 2021, it said on Friday, adding that supplies would rise further if India cancels a 5 percent duty on Russian fertiliser imports.
India, the world’s second largest consumer of crop nutrients after China, fulfils nearly 90 percent of its demand for phosphate-based fertilisers from imports.
The new agreement pertains to shipments between 2019 and 2021 and “will increase the volume and expand the range of phosphorus-based fertilisers supplied to India”, Phosagro chief executive Andrey Guryev said in a statement.
Since 2016, Phosagro, one of the world’s largest producers of phosphate-based fertilisers, has supplied about 1.2 million tonnes of product to India.
Phosagro also said in the statement it has reached an agreement with Indian Potash Ltd (IPL), India’s largest importer of mineral fertilisers, and Russia’s RDIF sovereign wealth fund to consider investments in the Russian fertiliser sector.
“We invite our Indian partners to take part in the construction of new plants in the Russian territory with us,” Guryev said.
The unveiling of the deal was timed to coincide with Russian President Vladimir Putin’s visit to India on Friday.
Phosagro, which competes with other global fertiliser producers such as U.S. firm Mosaic, hopes the new supply deal will make it more competitive in the Indian market, which has huge potential for further consumption growth, the Russian company said.
It added that it had asked the governments of both countries to discuss the potential cancellation of India’s 5 percent import duty on Russian fertilisers.
Russia supplies 1.5-1.8 million tonnes of fertilisers, mainly potash-based, to India a year. However, Russian supplies account only for about 8 percent of India’s fertiliser imports, which are mainly sourced from Canada, Israel and China. (Reporting by Vladimir Soldatkin, Polina Devitt, Rajendra Jadhav and Natalia Shurmina; writing by Polina Devitt; editing by Jason Neely and Jan Harvey)