India’s Fertiliser Subsidy Set to Exceed ₹1.71 Lakh Crore on Higher Global Prices

India’s Fertiliser Subsidy for 2026-27 is likely to exceed the budget estimate of ₹1.71 lakh crore, as import costs have risen amid tensions in West Asia.  

As per the PTI report, prices of urea and other fertilisers have shown an upward trend, increasing the burden on government finances. The subsidy bill is sensitive to global price movements, particularly for imported inputs.  

Any sustained increase in prices reflects higher spending, as retail prices for farmers are kept largely unchanged. 

Stock Position Ahead of Kharif 

The Department of Agriculture has estimated fertiliser demand for the 2026 kharif season at 390.54 lakh tonnes. Against this, states have already stocked 195.71 lakh tonnes, covering close to half of the requirement. 

Officials attributed the higher stocking levels to advance planning and early movement of supplies. Demand has been assessed state-wise, with distribution within districts to be handled by state administrations. 

Domestic Production and Imports 

Domestic fertiliser production during March and April stood at 67.76 lakh tonnes. This included 40.72 lakh tonnes of urea, 5.39 lakh tonnes of di-ammonium phosphate, 13.65 lakh tonnes of NPK fertilisers and 8 lakh tonnes of single super phosphate. 

Imports added 17 lakh tonnes during the same period. These were arranged through coordination between ministries overseeing ports and external affairs to avoid supply disruptions. 

Output Targets and Procurement Plans 

For May, production targets have been set at 22 lakh tonnes of urea, 4 lakh tonnes of di-ammonium phosphate, and 8 lakh tonnes of NPK fertilisers. Some urea plants that were temporarily shut are expected to resume operations after securing gas supplies. 

A global tender for urea imports has been processed, with supplies expected over May and June. Another tender for 19 lakh tonnes of NPK fertilisers has been issued to support peak season demand. 

Monitoring Arrangements 

The fertiliser department has been holding regular meetings with states to review stock levels and movement. A round-the-clock contingency mechanism is planned closer to the sowing season to address local distribution issues. 

Read More: India Restarts Wheat Export After 4 Years, Price Gap May Cap Demand! 

Conclusion 

While availability remains adequate, higher import costs linked to the West Asia situation are expected to push fertiliser subsidy spending beyond the initial budget estimate for 2026-27. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.