India's Fertiliser Subsidy Bill Expected to Increase by 20% Amid Global Price Surge
India expects annual fertiliser subsidy bill to rise by 20%
The Economic TimesImage: The Economic Times
India anticipates a 20% rise in its fertiliser subsidy bill for the current financial year, driven by escalating prices due to the Middle East crisis. The country, the largest importer of urea, has ordered 2.5 million metric tons of fertiliser, significantly impacting future import costs and subsidies for farmers.
- 01Fertiliser subsidy bill expected to rise by 20% this financial year.
- 02India has ordered a record 2.5 million metric tons of fertiliser.
- 03Import prices have nearly doubled in the last two months.
- 04The Middle East crisis is disrupting global fertiliser supplies.
- 05Rising costs could increase subsidies for farmers selling below market prices.
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India's fertiliser subsidy bill is projected to increase by 20% for the current financial year, primarily due to rising prices influenced by the ongoing crisis in the Middle East. According to Aparna Sharma, an official from the fertiliser ministry, India has placed orders for a record 2.5 million metric tons of urea, which is nearly double the price paid just two months prior. This surge in imports, which constitutes about a quarter of India's annual fertiliser imports, is expected to tighten global supply and further elevate prices. The country's fertiliser subsidy for the financial year ending in March 2024 is estimated at approximately 1.87 trillion rupees (around $19.85 billion USD). With the Middle East supplying about half of India's urea and diammonium phosphate (DAP) imports, the crisis is likely to have a lasting impact on import costs and subsidies for farmers, who rely on affordable crop nutrients. As demand typically spikes in June and July for crops like rice, corn, and cotton, the implications of these rising costs could be significant for agricultural production in India.
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The rise in fertiliser subsidy costs may lead to increased prices for farmers, affecting the affordability of crop nutrients and potentially impacting agricultural yields.
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