Archive · 22 Dec 2025
India's Fertiliser Subsidy Reform Urgently Needed
India's fertiliser subsidy is growing very fast and is expected to reach Rs 2 lakh crore in the next few years.
This is a big problem because it's making the country's budget unstable and harming the soil.
The current system gives too much support to urea, which is a type of fertiliser, and not enough to other important nutrients like phosphorus and potassium.
This is making farmers use too much urea, which is bad for the soil and the environment.
Experts say India should change this system to make it more balanced and efficient.
They suggest giving farmers direct income support or bringing urea under a different subsidy system.
This could save money and help farmers grow more food in a sustainable way.
India's fertiliser subsidy is expected to reach Rs 2 lakh crore in FY26, making it the second-largest item in the Union Budget.
The current subsidy system favours urea, leading to excessive use and imbalance in nutrient application, harming soil health and productivity.
India's NPK ratio is far from the recommended 4:2:1, with excessive nitrogen use and under-application of phosphorus and potassium.
Reforming the subsidy system could save around Rs 40,000 crore annually, which could be redirected towards agri-research, irrigation, and value chains in high-value agriculture.
Experts suggest either deregulating fertiliser prices with direct income support for farmers or bringing urea under the Nutrient-Based Subsidy (NBS) regime to correct price signals and promote balanced nutrient use.
- Who
- Prime Minister Narendra Modi and Indian policymakers
- What
- Reforming India's fertiliser subsidy system
- When
- Urgent attention needed, with expected subsidy touching Rs 2 lakh crore in FY26
- Where
- India
- Why
- To ensure fiscal sustainability, improve soil health, and enhance agricultural productivity
- Expected fertiliser subsidy in FY26
- Rs 2 lakh crore
- Union Budget in FY26
- Rs 51 lakh crore
- Allocation for agriculture and farmers' welfare in FY26
- Rs 1.37 lakh crore
- India's NPK ratio
- 10.9:4.4:1
- China's NPK ratio
- 2.6:1.1:1
- India's fertiliser consumption
- 182 kg/ha
- China's fertiliser consumption
- 373 kg/ha
- Nutrient use efficiency in India
- 35-40%