NEW DELHI, Nov. 11 -- "The Union Cabinet on Wednesday approved a subsidy outlay of Rs 62,370 crore for phosphatic and potassic (P&K) fertilisers for the 2026-27 rabi season, a 64.3 per cent increase over the Rs 37,952 crore allocated for the previous season, amid a surge in international fertiliser and input prices."
The increase of Rs. 24,418 crore comes as the international fertiliser market faces disruption since the US-Israel attacks on Iran in February. Restrictions on shipping through the Strait of Hormuz, a key route for global fertiliser trade, made things tougher. The move aims to protect farmers from global price fluctuations and ensure the availability of fertilisers at affordable rates.
Chaired by Prime Minister Narendra Modi, the Union Cabinet cleared the Department of Fertilizers' proposal to fix Nutrient Based Subsidy (NBS) rates for the period from October 1, 2026 to March 31, 2027.
In a post on X, Modi said farmers remained a priority for the government and that steps were being taken to ease the pressure on them amid difficult global conditions.
"Even amid difficult conditions around the world, we are leaving no stone unturned to make their lives easier," the Prime Minister said, adding that the approval would help protect farmers from fluctuations in international prices while ensuring the availability of fertilisers at reasonable rates.
Under the NBS scheme, the government pays a fixed subsidy per kg of nutrient -" nitrogen (N), phosphorus (P), potash (K) and sulphur (S) -" on notified P&K fertilisers, including DAP, MOP, SSP and NPK/NPKS grades. Rates are announced twice a year.
For this rabi season, the subsidy has been set at Rs 94.21 per kg for nitrogen, Rs 66.11 per kg for phosphorus and Rs 10.42 per kg for Sulphur, while the rate for potash has been left unchanged at Rs 2.38 per kg.
Briefing journalists after the Cabinet meeting, Union Minister for Information and Broadcasting Ashwini Vaishnaw said the tentative budgetary requirement for the rabi season is around Rs 62,370.02 crore, about Rs 24,417.73 crore more than that for rabi 2025-26.
Vaishnaw attributed the rise in fertiliser prices to the West Asia crisis and the Russia-Ukraine war. "The Modi government has provided a shield to farmers from geopolitical turmoil," he said. The retail price of DAP (di-ammonium phosphate) will remain unchanged at Rs 1,350 per 50-kg bag.
The subsidy on P&K fertilisers for 2026-27 has now reached Rs 1,03,903 crore, nearly double the Rs 54,000 crore budgeted for the NBS scheme.
The subsidy outlay for the rabi season exceeds what is left in the year's fertiliser budget.
The Union Budget set aside Rs 1,70,799 crore for the urea and NBS schemes combined in the 2026-27 fiscal year, covering both kharif and rabi seasons. Of this, about Rs 1.16 lakh crore was marked for urea and about Rs 54,000 crore for non-urea fertilisers.
In the first half, the Centre spent Rs 85,585 crore on urea and Rs 33,664 crore on nutrient-based fertilisers, about Rs 1.19 lakh crore in all, up 11 per cent on the year.
By April-September, the government had used 73 per cent of its budget estimate for urea and 62 per cent for nutrient-based fertilisers. About Rs 51,500 crore of the Rs 1.71 lakh crore remains for the second half, against a Rabi NBS requirement of Rs 62,370 crore.
The Cabinet also extended the special provisions for DAP on imported and domestic Triple Superphosphate (TSP) and imported Monoammonium Phosphate (MAP). The freight subsidy on Single Superphosphate (SSP) will continue this season to promote it as an affordable substitute for DAP. The subsidy on imported and domestic Ammonium Sulphate will also continue for the rabi season.
The Cabinet also approved a package to boost domestic production of sulphur and sulphuric acid. Manufacturers of sulphur will get 20 per cent of the actual procurement cost, subject to a floor price of USD 800 per tonne. For sulphuric acid, the support will be 20 per cent of the actual procurement cost, subject to a floor price of USD 266.67 per tonne. The Department of Fertilisers will issue detailed guidelines, Vaishnaw said.
The government said the overall fertiliser stock position is comfortable.
As of November 10, urea stood at 103.12 lakh tonne, against 72.14 lakh tonne a year ago. DAP stock was 28.65 lakh tonne (24.86 lakh tonne), NPK 60.87 lakh tonne (42.44 lakh tonne) and Muriate of Potash (MoP) 20.08 lakh tonne (10.78 lakh tonne). SSP stock was slightly lower at 22.49 lakh tonne, compared with 23.24 lakh tonne last year.
Welcoming the decision, Fertiliser Association of India (FAI) Chairman S Sankarasubramanian called it "timely and positive".
Published by HT Digital Content Services with permission from Millennium Post.