1 week ago
India's Fertiliser Subsidy Spending Reaches 56% of Budget Estimate
The government gives money to keep fertiliser affordable for farmers.
It has already spent nearly Rs 1 lakh crore this financial year.
More than three-quarters of that amount supported urea.
Urea is cheaper on the world market now than it was in April.
However, some other fertilisers, such as DAP and MoP, have become more expensive.
Supplies were disrupted after the Strait of Hormuz closed in February.
The government is buying fertiliser from more countries to reduce supply problems.
Farmers still pay Rs 266.50 for a 45-kilogram bag of urea and Rs 1,350 for a 50-kilogram bag of DAP.
The government has spent nearly Rs 1 lakh crore on fertiliser subsidies during the current fiscal year.
Urea subsidies account for Rs 77,871 crore, while DAP, MoP and NPK subsidies total Rs 21,255 crore.
Officials expect the subsidy bill to rise by another Rs 15,000–20,000 crore above the Rs 2.17 lakh crore incurred in FY26.
Urea’s landed cost has fallen about 60% to $390 per tonne, but DAP and MoP prices rose 15% and 10% respectively in July.
India imports about 70% of its fertiliser and raw-material needs, while retail urea and DAP prices remain capped for farmers.
- Who
- The Indian government, fertiliser producers and farmers.
- What
- The government has used about 56% of its budgeted fertiliser subsidy allocation during the current fiscal year.
- Where
- India, with fertiliser and raw materials sourced from international markets.
- When
- During the current fiscal year; prices cited for July and current urea costs.
- Why
- Higher global prices for fertiliser and LNG, along with supply disruptions after the Strait of Hormuz closure, increased subsidy costs.
Key facts
- Spending so far
- Nearly Rs 1 lakh crore
- Budget estimate
- Rs 1.76 lakh crore
- Urea subsidy
- Rs 77,871 crore for imports and domestic production
- Other fertiliser subsidies
- Rs 21,255 crore for DAP, MoP and NPKs
- Current landed urea cost
- About $390 per tonne, down from nearly $1,000 in April
- Retail urea price
- Rs 266.50 per 45-kilogram bag
- Estimated additional outgo
- Rs 15,000–20,000 crore above the Rs 2.17 lakh crore incurred in FY26
Sources
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