The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday cleared ₹41,534 crore towards nutrient-based fertiliser subsidy for the summer-sowing season, raising it by ₹4,317 crore, a nearly 12% jump from the previous cropping cycle, to make up for higher costs and cushion farmers amid supply disruptions due to the West Asian conflict.
The higher subsidy, which covers mixed crop chemicals, is aimed at keeping the price of 50-kg packages of diammonium phosphate (DAP) steady at ₹1,350 despite higher import prices.
“The West Asian conflict has had an impact on fertilisers. There’s no problem of availability in India. Some people have started hoarding, which is not good,” information and broadcasting minister Ashwini Vaishnaw said, briefing reporters.
The nutrient-based subsidy regime offers fertilisers at lower-than-market price to farmers based on their phosphatic and potassic content, which is aimed at discouraging overuse.
Food security in the world’s most-populous country is closely linked to the adequate availability and affordability of key fertilisers, as farmers prepare for the summer-planting season.
The government makes available 28 grades of P&K fertilisers, which are also covered, to farmers at subsidised prices through manufacturers and importers. These crop nutrients are sold by manufacturers at a discount, who are then reimbursed by the government.
Fertiliser manufacturers say a ceasefire announced by Iran and the US has come as a breather, which will help boost availability. “The ceasefire is a timely and positive development as it is expected to improve LNG availability from the Gulf and support uninterrupted fertiliser supplies ahead of the kharif sowing season. This will help stabilise domestic production, ease import-related cost pressures, and curb speculative price increase,” said PS Gahlaut, managing director, Indian Potash Limited.
{{/usCountry}}Fertiliser manufacturers say a ceasefire announced by Iran and the US has come as a breather, which will help boost availability. “The ceasefire is a timely and positive development as it is expected to improve LNG availability from the Gulf and support uninterrupted fertiliser supplies ahead of the kharif sowing season. This will help stabilise domestic production, ease import-related cost pressures, and curb speculative price increase,” said PS Gahlaut, managing director, Indian Potash Limited.
{{/usCountry}}The country relies on imports of fertilisers such as urea, DAP and muriate of potash, along with liquefied natural gas, which fires crop-nutrient plants.
The latest hike in subsidies pertains to a category of crop nutrients that are heavily reliant on imports. Higher shipping costs and a supply crunch, triggered by Iran’s near-blockade of maritime traffic through the Strait of Hormuz, came barely two montha ahead of the kharif or summer-sown season, which accounts for one half of India’s annual food supply.
Millions of farmers depend on subsidised crop nutrients to grow an array of crops, such as rice, pulses, soya, corn and cotton critical to food security in the world’s most populous country. An increase in prices or shortages can stoke anger among food producers, who often have affiliations with influential unions. Last year, growers in some states, such as Andhra Pradesh, faced temporary disruptions after China tapered down exports.
The West Asian crisis will increase the government’s overall annual subsidies. Higher spending comes at a time when the country plans to promote rational use of heavily subsidised crop nutrients.
Urea use in India, for instance, has surged by about 170% from 2009-10 to 2023-24, the government’s Economic Survey for 2025-26 said in February. Over-application of cheaply available agro-chemicals has had disastrous consequences, from depleting soil quality to poorer yields.
Barely days before the US and Israel launched strikes on Iran, agriculture minister Shivraj Singh Chouhan pitched for transferring the country’s ₹1.71 lakh-core fertiliser subsidy directly to farmers’ bank accounts, instead of routing it through crop-nutrient manufacturers for more efficient distribution and to minimise misuse.
India is in talks with several countries to secure fertilisers, both from traditional and new suppliers, as it seeks to diversify imports.