India's fertiliser subsidy bill is set to significantly increase by an estimated Rs 70,000 crore in FY27, potentially reaching Rs 2.41 trillion, as rising import costs driven by the West Asia crisis put pressure on the government's budget.
Key Points
- India's fertiliser subsidy bill is estimated to rise by approximately Rs 70,000 crore in FY27, reaching around Rs 2.41 trillion.
- The increase is attributed to escalating import costs for urea and other fertilisers, influenced by the ongoing West Asia crisis.
- If current estimates hold, FY27's subsidy could be among the highest in recent years, nearing the Rs 2.51 trillion spent in FY23 after the Russia-Ukraine war.
- Despite cost pressures, fertiliser availability for the 2026 kharif season is deemed 'comfortable,' with diversified import sourcing and sufficient domestic stocks.
- India is actively diversifying import routes and employing a consortium-based procurement approach to secure essential fertilisers and raw materials.
India's fertiliser subsidy bill for 2026-27 (FY27) may surge by Rs 70,000 crore to Rs 2.41 trillion, driven by rising import costs of urea and other fertilisers amid the ongoing West Asia crisis, a senior government official said on Monday.
If the actual subsidy outgo comes close to current estimates, India's FY27 fertiliser subsidy could be among the highest in recent years.
The last time India spent more on fertiliser subsidies than the amount projected for FY27 was in FY23, when the country incurred over Rs 2.51 trillion in subsidy expenditure following the Russia-Ukraine war.
The budgetary allocation for fertiliser subsidies in FY27 stands at Rs 1.71 trillion.
Rising Costs and Official Confirmation
“The subsidy bill will go up, but what percentage is something I cannot say,” Aparna S Sharma, additional secretary at the Department of Fertilisers, said on the sidelines of the inter-ministerial briefing on West Asia developments.
When asked whether the increase could be as high as Rs 70,000 crore, Sharma as per news agency PTI said: “Maybe.”
Ensuring Fertiliser Availability
Despite the cost pressures, Sharma said fertiliser availability for the 2026 kharif season remains “comfortable”, with stocks exceeding 51 per cent of the total requirement of 39 million tonnes (mt).
The remaining requirement is being met through diversified import sourcing.
Typically, opening stocks account for around 33 per cent of the total requirement.
Current fertiliser stocks stand at 20.09 mt, she said.
Domestic Production and Import Diversification
Domestic production is running at around 80,000 tonnes a day, with output since the onset of the West Asia crisis at 8.62 mt, slightly lower than the 9.3 mt recorded during the year-ago period.
“There is a small shortfall, which we hope to bridge in the coming months,” Sharma said, adding that sufficient gas supply is available for urea plants.
India has also been actively diversifying import routes away from the Strait of Hormuz, with over 2.2 mt of fertilisers already landed on Indian shores.
Through a consortium-based procurement approach, the country has secured around 1.35 mt of di-ammonium phosphate (DAP) and 700,000 tonnes of NPK complex fertilisers, apart from ammonium sulphate, phosphate, and other raw materials.
Review and Payment Systems
The Department of Fertilisers is also reviewing the availability of other inputs required for urea and complex fertiliser production.
Subsidy payments are being cleared weekly through the Integrated Fertilizer Management System.
“Overall, the situation remains strong, stable and comfortable,” Sharma said.
