NEW DELHI: India has signed a three-year urea import deal with Oman India Fertiliser Company (Omifco) to ship in 1 million tonnes of the crop nutrient a year, sources said recently.

Omifco is owned 50% by Oman Oil Co (OQ) and 25% each by Indian Farmers Fertiliser Cooperative Ltd (Iffco) and Krishak Bharati Cooperative Ltd (Kribhco).

The first shipment under the deal arrived on Wednesday at Mundra port in western India, sources said.

India's previous 15-year urea import deal with Omifco lapsed in 2020.

India's finance ministry provides subsidy for sales of urea at a government fixed low price of about 242 rupees, excluding local taxes and some other charges, per 45 kilogram bag to protect farmers. Lower retail prices of urea has led a sharp surge in India's fertiliser subsidies.

For the current fiscal year ending on March 31, India is likely to spend a 1.5 trillion rupees on fertiliser subsidies due to a rally in potash, phosphate and urea prices in the world market.

India imports about a third of its urea requirements. During April 2021-January 2022, the first 10 months of this fiscal year, India produced 21 million tonnes of urea and imports were at about 7.2 million tonnes, India's Fertiliser Minister Mansukh Mandaviy told lawmakers recently.