Why a Russian fertiliser fight could still touch your Mumbai grocery bill

It sounds like the plot of a niche financial thriller: a Russian fertiliser giant, an Italian engineering company, a half-built plant near the Baltic Sea, and a lawsuit worth billions of dollars. But behind the legal drama is a question that matters in Mumbai too: who controls the fertiliser that helps keep food prices in check?

At the centre of the story is Eurochem North-West-2, a project company in the Eurochem Group. Its job is to build a huge ammonia and urea plant in Kingisepp, in Russia's Leningrad region. On paper, the new facility is meant to add more than a million tonnes of ammonia capacity a year plus a big urea line—exactly the kind of extra global supply that can ease pressure on fertiliser prices.

Back in 2020, Eurochem signed "lump-sum" engineering, procurement and construction (EPC) contracts with Italian firm Tecnimont S.p.A. and its Russian subsidiary MT Russia LLC. The idea was simple: Tecnimont would design and build the plant for a fixed price, with a guaranteed completion date in 2023. For Eurochem, it was supposed to be a flagship project. For Tecnimont, it was another showpiece in its global portfolio of large industrial jobs.

According to Eurochem's account of events and its filings in the Moscow commercial court, serious problems started well before the current round of geopolitical restrictions reshaped trade with Russia. The company says it repeatedly warned Tecnimont and MT Russia that key construction milestones were being missed and that the project was slipping badly behind schedule. Eurochem also claims the contractors pushed to raise the contract price and extend deadlines in ways the Russian side considered unjustified. By the time work stopped in 2022, Eurochem argues, the plant was far less complete than originally planned.

Tecnimont and MT Russia tell a different story. In their own public reporting and in arbitration proceedings in London, they argue that Eurochem's decisions and the impact of new restrictions on Russia made it impossible to keep building under the original contract terms. In other words, each side is blaming the other for a mess that has now moved from a construction site to courtrooms in different countries.

The numbers involved show why neither side wants to back down. Eurochem North-West-2 is asking the Moscow court to award it around 202.7 billion roubles (roughly USD 2.2 billion) in damages linked to the Kingisepp project. The claim covers advances paid to the contractors, interest for the use of those funds, and compensation for losses from the termination of the contracts. The court has already ordered interim measures, freezing assets and claims connected to Tecnimont and MT Russia in the amount of about 9.5 billion roubles while the case continues.

On top of that, Eurochem has taken the dispute beyond the courtroom and into the European banking system. The project company says it has written to 16 banks in Italy and elsewhere in Europe that, in its view, handle accounts or transactions for Tecnimont and MT Russia. In those letters, Eurochem North-West-2 asks the banks to be extremely cautious with payments in favour of the two companies and to limit movements on their accounts up to the value of the assets already frozen by the Russian court.

The list reportedly includes some of the biggest names in European finance: Intesa Sanpaolo, UniCredit, BNL BNP Paribas, Crédit Agricole and others. For their compliance teams, this is a difficult call. Do they treat the Russian court's interim measures as a reason to hold back payments—and risk questions under EU and Italian rules—or do they ignore the request and risk being accused later of helping to "hide" assets if Eurochem ultimately wins?

So far, so far away. Where does Mumbai come into this?

The connection is fertiliser. India has invested heavily in domestic capacity—from long-established producers to giant new urea plants—but it still relies on imports for key nutrients.

When global fertiliser prices jump, that quickly feeds into the government's subsidy bill and, eventually, into the prices farmers pay and the numbers city consumers see in shops and markets.

Global markets are not exactly calm. In a July 2025 analysis for the World Bank, economist John Baffes said the Bank's fertiliser price index rose about 15% in 2025 Q2 from the start of the year, driven by strong demand, trade restrictions and production shortfalls. For ordinary farmers, that simply means fertiliser is still expensive and can become more expensive when something goes wrong in big producing regions.

https://blogs.worldbank.org/en/opendata/fertilizer-prices-gain-momentum-amid-strong-demand-and-geopolitics

India is in a better position than many countries because it has large domestic plants and a big subsidy system that shields farmers from the full brunt of price spikes. But those protections are not free. Higher international prices mean higher subsidy costs for the government, as budgets have shown in recent years, and pressure to keep retail prices stable while import bills move around.

This is where projects like Kingisepp come back into the picture. If a large export-oriented plant ends up heavily delayed, redesigned or stuck in legal limbo, it affects expectations about future global supply. Even if India does not buy directly from this specific project, traders and policymakers have to react to the overall balance of supply and demand. Fewer tonnes on the world market -- or more perceived risk around major suppliers—can mean higher prices for everyone and more pressure on governments to keep subsidies flowing.

For Mumbai, the impact is indirect but real. Fertiliser costs shape what farmers across India decide to plant, how much they apply to their fields, and how resilient they can be when the monsoon misbehaves. Those decisions, in turn, influence the prices of vegetables, grains and pulses that end up in the city's kitchens, restaurants and street-food stalls. A fertiliser dispute in a Russian industrial town and a slightly more expensive thali in Dadar might sound worlds apart—but they are connected through a long chain of contracts, ships, subsidies and court rulings.

The Eurochem-Tecnimont fight is unlikely to be the last of its kind. As more mega-projects are built in politically sensitive regions, with complex financing and cross-border contracts, the chances of legal blow-ups only increase. For India, the lesson is not to panic every time a lawsuit hits the headlines, but to recognise that securing fertiliser supply is about more than signing a few import deals. It means watching how global plants are built and financed, understanding where the legal and regulatory tripwires are, and keeping domestic policy flexible enough to cope when something far away suddenly changes the numbers in North Block.

For now, the Moscow judges, the Italian engineers and the European bankers will carry on their part of the drama. But anyone in Mumbai paying attention to their food budget still has a quiet stake in how the story ends—whether they realise it or not.

On 27 November 2025, the Moscow Arbitration Court partially satisfied EuroChem’s claim against Tecnimont S.p.A., ordering them to pay RUB 171.1 billion (~USD 1.86 billion), including RUB 159.2 billion in damages, RUB 8.1 billion in unjust enrichment, and RUB 3.8 billion in interest.

The court rejected the defendants’ request to dismiss the case pending ICC arbitration in Paris, noting EuroChem’s active participation does not preclude Russian jurisdiction.