India's Fertiliser Subsidy Expected to Exceed Budget by ₹70,000 Crore Amid Global Price Surge
Fertiliser subsidy may surpass budgeted estimates by Rs 70k cr
The Economic TimesImage: The Economic Times
India's fertiliser subsidy is projected to exceed budget estimates by ₹70,000 crore, reaching approximately ₹2.40 lakh crore for the fiscal year. The surge in costs is attributed to rising global prices of di ammonium phosphate (DAP) and urea, exacerbated by supply disruptions from the West Asia conflict.
- 01Fertiliser subsidy may reach ₹2.40 lakh crore, exceeding the budgeted ₹1.71 lakh crore.
- 02Global prices for DAP and urea have surged due to the West Asia crisis.
- 03India imports over 80% of its DAP needs, heavily influencing subsidy costs.
- 04The government is increasing imports to maintain adequate fertiliser stocks for the kharif sowing season.
- 05Past price spikes during crises have led to significant subsidy increases, as seen in FY23.
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India's fertiliser subsidy is expected to surpass budget estimates by ₹70,000 crore, totaling around ₹2.40 lakh crore for the current fiscal year. This increase is primarily driven by a surge in global prices for di ammonium phosphate (DAP) and urea, following supply disruptions caused by the ongoing conflict in West Asia. The Indian government, which relies on imports for over 80% of its DAP requirements, has seen prices for urea rise by 85% to $950 per tonne and DAP by 30% to $900 per tonne since March 2026. To ensure that farmers have access to affordable fertilisers, the government is ramping up imports ahead of the kharif sowing season. The high subsidy outgo is attributed to increased procurement volumes and rising freight costs. In the past, similar price spikes have led to substantial increases in subsidy expenditures, as seen during the Ukraine crisis in FY23, when the subsidy reached ₹2.54 lakh crore.
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Farmers may face higher costs for fertilisers due to increased subsidy expenditures, but the government is committed to ensuring affordable prices.
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