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Fertilizer Subsidy Bill to Skyrocket by Rs 70,000 Crore
18 May
Summary
- Fertilizer subsidy bill may increase by Rs 70,000 crore to Rs 2.41 lakh crore.
- Rising import costs due to the West Asia crisis are driving the subsidy increase.
- Fertilizer availability for the upcoming kharif season remains comfortable.
The Indian government's fertilizer subsidy bill for the 2026-27 fiscal year is anticipated to rise significantly by Rs 70,000 crore, potentially reaching Rs 2.41 lakh crore. This escalation is driven by increasing import costs for urea and other essential fertilizers, a situation compounded by the ongoing West Asia crisis.
The current budgetary allocation for fertilizer subsidies in 2026-27 stands at Rs 1.71 lakh crore. However, an Additional Secretary from the Department of Fertilisers indicated that the subsidy bill would indeed go up, possibly by the estimated Rs 70,000 crore.
Despite these cost pressures, the supply of fertilizers for the upcoming 2026 kharif season is described as comfortable. Stocks currently exceed 51% of the total requirement, with diversified import sources helping to bridge any gaps. Current fertilizer stocks stand at 200.9 lakh tonne.
Domestic production of fertilizers is ongoing, though there is a slight shortfall compared to the previous year, which is expected to be addressed. India is actively diversifying its import routes to mitigate risks associated with the Strait of Hormuz, having already received over 22 lakh tonne of fertilizers through alternative channels. Subsidy payments are being managed efficiently through a dedicated system, ensuring overall stability in the fertilizer supply chain.
