Summary of Key Issues
India has recently faced a tripartite set of challenges that represent both internal and external pressures:
1. Twenty-eight ships carrying energy and fertilizer materials are stranded in the Strait of Hormuz, leading to a shortage of domestic energy supplies and threatening the production of fertilizers essential for spring planting.
2. Farmers across the country have staged nationwide protests due to concerns about the impact of the India-US trade agreement on their agricultural markets.
3. These issues highlight the breakdown of India's long-held policy of "strategic autonomy"—its tilt towards the United States has strained relations with Iran, compromising its energy security. While seeking to reduce dependence on China, India must now turn to China for urea exports. However, trying to appease farmers may result in the loss of trade opportunities with the US, leaving it in a difficult position.
1. Ships Stranded in the Hormuz: India's Energy Supply at Risk
The Strait of Hormuz is a vital lifeline for India's energy supply, as over 80% of its liquefied petroleum gas (LPG), as well as significant amounts of crude oil and natural gas, comes from Gulf countries. With the escalation of tensions between the US and Iran, this maritime route has become highly risky. Twenty-eight Indian ships, carrying fuel for factories, cooking gas for restaurants, fertilizer materials, and urea needed for spring planting (which requires natural gas), are unable to proceed.
The most immediate impact is on the food industry: LPG reserves in restaurants across the country will only last for two days. A restaurant owner in Delhi stated that if the gas supply continues to decline, they will have to switch to electric stoves or coal for cooking. The situation with fertilizers is even more critical; 30% of India's natural gas is used for fertilizer production, and current shortages are prompting manufacturers to cut production. Reuters warns that a prolonged shortage could severely affect grain cultivation during spring planting.
Indian Foreign Minister Sujesh Sharma claimed that dialogue with Iran has led to the release of two LPG ships, but the remaining 22 are still stuck in the strait, with 611 sailors waiting to return home. Ironically, India had previously attempted to reduce its reliance on China by shifting fertilizer imports to Gulf countries; now, with Hormuz tensions, it is once again dependent on China, importing 2.12 million tons of urea this fiscal year—a 20-fold increase from last year. The Chinese Ministry of Foreign Affairs responded, indicating that China also has its own needs for urea during spring planting and must prioritize its own domestic requirements.
2. Farmers Protest: Fear of US Competition in the Agricultural Market
Protests by farmers have emerged on February 12, with millions participating across various unions, from Punjab's grain warehouses to apple orchards in the Himalayas, against the unsigned India-US trade agreement. The agreement stipulates that India must eliminate or reduce tariffs on US agricultural products such as sorghum, fresh apples, soybean oil, and wine. Farmers are concerned: "US agricultural products are cheaper and subsidized, giving us no chance to compete." Apple growers in Himachal Pradesh are particularly worried; recent warm winters and hailstorms have already significantly reduced yields, and the arrival of cheap US apples could lead to the closure of small orchards. Cotton farmers in Punjab face even greater difficulties, with plummeting cotton prices and accumulated debts.
Opposition party leader Rahul Gandhi used the protests to criticize the government, calling the agreement "anti-farmer" and detrimental to food security. Farmers are angry that these decisions were made by officials in air-conditioned offices without considering their realities. The government insists that the agreement mainly focuses on manufacturing, with only limited concessions for agriculture, but farmers believe any concession could be the final straw.
3. Strategic Autonomy Becomes a Balancing Act: India Caught Between the US and Iran
India has traditionally maintained a non-aligned policy to navigate relations with major powers. However, this balance is becoming increasingly difficult to maintain. To improve ties with the US, India has aligned itself more closely with Israel (with Modi and Netanyahu's photos circulating in the Middle East), and it also co-signed a UN resolution condemning Iran. As a result, Iran no longer grants preferential treatment to Indian ships, leaving them stranded in the Hormuz.
On one hand, India wants to sign the trade agreement for access to the US market but must make concessions in agriculture, which affects farmers. On the other hand, it relies on Iranian energy, and its previous stance has strained relations with Iran, making it difficult to obtain necessary supplies. A former Indian ambassador to Iran noted that India's 80-year policy of "neutral engagement" has clearly shifted towards the US, with the consequence being compromised energy security.
4. Diversification Fails: Still Relying on China for Fertilizers
India once touted a strategy to diversify its energy and fertilizer imports, turning to Gulf countries (which account for 70% of its urea imports). However, with Hormuz tensions, these supplies are now unavailable, forcing India to rely on China again. This fiscal year, India imported 2.12 million tons of urea from China—20 times more than last year—demonstrating the failure of its "de-Chineseization" efforts.
China's position is practical: With a population of 1.4 billion, it also needs urea for its own spring planting and must prioritize domestic needs. India realizes that diversification has not solved its problems; instead, its reliance on the Gulf countries has left it in a vulnerable position.
In conclusion, while India's "strategic autonomy" is being tested by these challenges, it finds itself caught between competing priorities: pleasing the US may offend Iran, securing energy may require dependence on China, and signing a trade agreement may necessitate soothing farmers. The balance between these interests is becoming increasingly elusive.