Fertilizer Subsidy Bill Estimated to Rise by 20 Percent

28-Apr-2026 12:55 PM

New Delhi. Due to the ongoing crisis in West Asia, the import of chemical fertilizers has become significantly more expensive, and production costs within the domestic sector have also risen. Under these circumstances,

if fertilizer prices are maintained at their previous levels, the government's subsidy bill could increase by up to 20 percent. The government will have to bear the burden of this additional expenditure.

It is noteworthy that India relies heavily on foreign sources for the import of Urea, DAP, and Potash. During the Kharif season—spanning from June to August—there is expected to be a massive demand for chemical fertilizers within the domestic market; to meet this demand, imports from abroad will have to be ramped up, albeit at higher prices.

It is pertinent to note that India is the world's leading importer of Urea. Recently, a state-owned company issued a tender for the import of 2.5 million tonnes of Urea, wherein the quoted offer prices were double the rates received in the tender issued in February.

In the absence of viable alternatives, the government was compelled to accept these elevated offer prices. The government provides subsidies to companies that supply fertilizers to farmers at government-fixed prices.