India’s Fertilizer Strategy Balances Costs Amid Volatile Global Prices

The Indian government boosts subsidies under the Nutrient-Based Subsidy scheme for the Rabi 2025-26 season, aiming to shield farmers from volatile global fertilizer prices. The strategy promotes efficient nutrient use, enhancing soil health and crop yields, while raising fiscal sustainability concerns.

The Government of India has projected a fertilizer requirement costing Rs 37,952 crore for the Rabi 2025-26 season, an increase of Rs 736 crore from the Kharif 2025 period. This move signifies a robust response to unstable international fertilizer and raw material prices.

To prevent cost hikes from affecting farmers, subsidies under the Nutrient-Based Subsidy (NBS) scheme have been substantially increased, particularly for Di-Ammonium Phosphate (DAP), with subsidies rising from Rs 21,911 to Rs 29,805 per tonne. This adjustment aims to maintain fertilizer affordability during crucial sowing months.

The NBS framework, diverging from past fertilizer policies focusing on urea, links subsidies to nutrient content, encouraging balanced fertilization and addressing soil health issues. While expensive, this strategy has contributed to higher yields, as evidenced by improved foodgrain productivity from 1,930 kg per hectare in 2010-11 to 2,578 kg per hectare in 2024-25.

(With inputs from agencies.)