Cabinet approves Rs 62,370 crore fertiliser subsidy for rabi season

TL;DR in 30 sec

• The Union Cabinet approved Nutrient Based Subsidy rates for phosphatic and potassic (P&K) fertilisers for rabi 2026-27, with a tentative subsidy requirement of Rs 62,370.02 crore, The Tribune reported, citing ANI.
• That is about Rs 24,417.73 crore more than the Rs 37,952.29 crore set for rabi 2025-26, according to The Tribune.
• The rates apply from 1 October 2026 to 31 March 2027, The Tribune reported.
• The retail price of DAP stays at Rs 1,350 per 50-kg bag, according to Outlook Business, The Pioneer and Daily Excelsior.
• Minister Ashwini Vaishnaw linked the higher fertiliser prices to the West Asia crisis and the Russia-Ukraine war, Daily Excelsior reported, citing PTI.

What happened

On Wednesday, 11 November, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Department of Fertilizers’ proposal to fix subsidy rates for P&K fertilisers for the rabi season, Outlook Business reported. Rabi is the winter crop season.

The subsidy covers di-ammonium phosphate (DAP) and NPKS grades, which contain nitrogen, phosphorus, potash and sulphur, according to Outlook Business. The government currently offers 28 grades of P&K fertilisers at subsidised prices, The Tribune reported.

The Pioneer listed the per-kilogram subsidy rates: Rs 94.21 for nitrogen, Rs 66.11 for phosphorus and Rs 10.42 for sulphur. The rate for potash is unchanged at Rs 2.38, the newspaper said.

The subsidy is paid to fertiliser companies, not to farmers directly. “The subsidy would be provided to the fertilizer companies as per approved and notified rates,” the government said, as quoted by The Tribune.

The Cabinet also approved a package to raise domestic production of sulphur and sulphuric acid, The Pioneer reported. It pays 20% of the actual cost of buying them, with floor prices of $800 a tonne for sulphur and $266.67 a tonne for sulphuric acid, according to The Pioneer.

Why it matters for India 🇮🇳

The subsidy is meant to keep nutrients affordable for farmers even though global prices have risen sharply, The Pioneer reported.

Information and Broadcasting Minister Ashwini Vaishnaw told reporters that fertiliser prices had “shot up immensely” because of the West Asia crisis and the Russia-Ukraine war, Daily Excelsior reported. “Through this entire process, domestic manufacturing will increase, and farmers will not face any additional burden,” he said, as quoted by The Tribune.

Stocks are higher than a year ago, according to The Pioneer. On 10 November, India held 28.65 lakh tonnes of DAP, against 24.86 lakh tonnes a year earlier, and 103.12 lakh tonnes of urea, against 72.14 lakh tonnes, the newspaper reported.

Background

The Nutrient Based Subsidy (NBS) scheme has been in place since 1 April 2010, The Tribune reported.

The Cabinet said the new rates follow “recent trends in the international prices of fertilizers and inputs”, The Tribune reported. These include the prices of urea, DAP, muriate of potash (MOP) and sulphur, the newspaper said.

The rabi subsidy is about 64% higher than last year’s, The Tribune reported. The Pioneer described it as a 50% rise over the kharif season that has just ended. The two figures are measured against different seasons.

Different perspectives

The government presents the decision as protection for farmers. “The Modi government has provided a shield to farmers from geopolitical turmoil,” Vaishnaw said, as quoted by Daily Excelsior and The Pioneer.

The Pioneer’s figures show the cost. The Union Budget set aside Rs 1,70,799 crore for urea and NBS together in 2026-27. The P&K subsidy now totals Rs 1,03,903 crore, nearly double the Rs 54,000 crore budgeted for NBS, the newspaper reported. About Rs 51,500 crore remains for the second half of the year, against the rabi requirement of Rs 62,370 crore, according to The Pioneer.

The sources carried no statement from farmer groups or opposition parties.

Open questions 🤔

• Will the government add money to the fertiliser budget to cover the rabi subsidy?
• Will a 50-kg bag of DAP still cost Rs 1,350 at the end of the season in March 2027?
• How much more sulphur and sulphuric acid will Indian plants produce under the new support package?

What to watch next

The approved rates apply until 31 March 2027, the end of the rabi season, according to The Tribune.