Is there an American ‘mole’ in the Indian cabinet? Seems so! On Wednesday the cabinet formally approved a proposal that India should acquire potash mines and fertiliser assets abroad on a priority basis as one way of meeting the country’s acute shortage. The global price is sky-rocketing. Curiously, the same day, US imposed fresh sanctions against Belarus on account of that country’s alleged democracy deficit and the new sanctions include Belarus’ Grodno Azot fertiliser manufacturer.
The catch is that Belarus is one country that India has zeroed in for making investments in the fertiliser sector. GA is doing splendidly well and is targetting a 40% increase in production capacity by 2016. Out of Its present capacity to produce 7 lakhs tonnes of mineral fertilisers, GA exports about 40% of its production volumes. India can be potentially a big partner for Belarus.
However, US also eyes India as a captive market. The US Revealed Competitive Advantage [RCA] value shows US RCA for fertiliser at higher than 1.25, which means that from a supply aspect, the export item is expected to show a high growth rate. (There are only 12 items in major US exports to India with more than 1 RCA value.) A challenger from Belarus with proven capacity is the last thing US would want when it is firing all 8 cylinders to boost exports — be it fertiliser or weapons. It’s a mean world. Why should it matter if Belarus aspires to make a livelihood out of fertiliser exports?