China has reduced its export controls on urea exports to India, which could lead to exports of up to 300,000 tons in a short period. This action is a sign that trade tensions between these two nations are likely to reduce given that both countries are reacting to the new global changes in trade brought by growing U.S. trade barriers.
China's decision is in line with these recent events, as the U.S. used to impose higher tariffs on Indian products. These tariffs came after India maintained its energy trade with Russia, something that has seen New Delhi intensify its economic ties with other partners, including China.
China had previously imposed limits on the export of urea to keep the home supply stable. Nonetheless, India, being the largest importer of urea in the world, has always depended on Chinese imports to fuel its agricultural needs. India received nearly 50% of Chinese urea exports in 2023. However, in 2024-25, the same exports dropped drastically to approximately 100,000 tonnes compared with 1.87 million tonnes in the previous year.
In June 2025, China loosened more extensive urea export restraints, yet proceeded to restrict its exports to India. The recent resolution that those barriers should be lifted puts a new emphasis on the approach. The latest trade stream can assist in cooling international fertiliser prices and regulating the supply of importing nations.
Domestic urea manufacturing in India is not enough to sustain its huge agricultural industry which relies significantly on urea's availability. According to the Fertiliser Association of India, imports of urea in the previous financial year decreased by one-fifth, to 5.7 million tonnes. The decline in Chinese supply caused this shortcoming.
India uses large urea subsidies to help supplement agricultural output. Continuous food supply is essential to agricultural production and farmers' livelihoods. The renewal of Chinese exports might provide a stable cost in the short term and minimize purchasing problems in the coming growing season.
India's recent action to open visas to Chinese tourists and potential high-level meetings between the Prime Minister of India, Narendra Modi and the President of China, Xi Jinping, later this month are all signs of mend bilateral relationships and trade cooperation.