India, the world's largest urea importer, anticipates a significant 20% increase in its fertiliser subsidy bill for FY27, reaching approximately ₹1.71 trillion, as global prices surge due to the ongoing West Asia crisis, though retail prices for farmers will remain stable.
Key Points
- India's FY27 fertiliser subsidy bill is expected to rise by 20% to approximately ₹1.71 trillion due to increased global prices stemming from the West Asia crisis.
- Despite the surge in global prices, the retail prices of urea and di-ammonium phosphate (DAP) will remain unchanged for farmers.
- India plans to import 6.4 million tonnes of urea and 1.9 million tonnes of other fertilisers at higher prices for the kharif season.
- Adequate availability of urea, DAP, MoP, and NPKS is reported for the current period, ensuring supply for the kharif season.
- The government does not foresee a need for petrol and diesel imports for domestic requirements, despite a recent surge in HSD sales in Andhra Pradesh.
India, the world’s biggest urea importer, expects its fertiliser subsidy bill for the current financial year (FY27) to swell by about 20 per cent due to a surge in global prices amid the West Asia crisis, a senior official said on Monday.
Addressing an inter-ministerial briefing on the impact of recent developments in West Asia, Aparna S Sharma, additional secretary in the Department of Fertilisers, however, added that the retail prices of urea and di-ammonium phosphate (DAP) would remain unchanged, and that there was adequate supply of fertilisers for the kharif season.
Government's Commitment to Farmers
“Despite the actual (non-subsidised) price of a 45 kg urea bag being at Rs 4,000, the Centre will continue to provide the same at a highly affordable rate of Rs 266.5 per bag,” Sharma said.
A jump in subsidies is projected as India plans to import 6.4 million tonnes (mt) of urea and 1.9 mt of other fertilisers at high prices this kharif season.
The Centre pegged the FY27 fertiliser subsidy at Rs 1.71 trillion in the Union Budget presented in February (before the start of a conflict between the US-Israel and Iran).
This was about 8.40 per cent lower than the FY26 revised subsidy estimate of Rs 1.86 trillion.
The FY26 RE itself was about 11 per cent more than the Budget estimates.
Global Price Impact and Import Strategy
India recently placed an order to purchase 2.5 mt of urea at nearly double the price paid two months ago, as the Iran conflict disrupts global supplies and drives up prices.
A decision on further imports of urea and non-urea fertilisers, Sharma said, would be taken after assessing domestic production and demand.
For the April 1-26 period, urea availability stood at 7.15 mt, as against the requirement of 1.81 mt.
Urea stocks as on April 27 last year were at 7.06 mt.
DAP availability was 2.23 mt in this period, as against the requirement of 0.59 mt.
DAP stocks as on April 27 last year were 1.50 mt.
The availability of MoP (muriate of potash) stood at 0.83 mt, as against the requirement of 0.19 mt, while NPKS availability stood at 5.34 mt, as against the requirement of 0.84 mt.
Fuel Supply and Regional Security
Sujata Sharma, joint secretary at the Ministry of Petroleum and Natural Gas (MoPNG), said that the government did not foresee a situation where India would need to rely on imports of petrol and diesel for domestic requirements.
Despite a heavy reliance on imports of crude oil, India is a net exporter of petrol and diesel due to its robust refining capacity.
The official’s comments came after reports of fuel unavailability at several retail outlets in Andhra Pradesh, leading to long queues and panic buying at pump stations in the state.
“We have observed an exceptional growth of 30-33 per cent in HSD (high speed diesel) sales.
"That is the reason why certain ROs (retail outlets) have faced unavailability of stocks.
"By today evening, stocks will be available at all retail outlets,” said Sharma.
India’s shipping ministry said 17 Indian seafarers on board a Togo-flagged oil or chemical tanker are safe after the vessel came under a warning fire from the Iranian Coast Guard.
The incident took place near the Outer Port Limit of Shinas in Oman.
Amid ongoing tensions in West Asia, India’s National Security Advisor Ajit Doval visited the United Arab Emirates on April 25-26 for high-level discussions aimed at strengthening the India-UAE Comprehensive Strategic Partnership, alongside reviewing the regional security situation and other issues of mutual interest. (With agency inputs).
