Doubles subsidy on nitrogen, 25 per cent up in phosphorus, 3-times more for sulphur
Cabinet Clears Higher Rabi Fertiliser Subsidy
The Union Cabinet has approved a nutrient-based subsidy (NBS) outlay of ₹62,370.02 crore for the 2026-27 rabi season, spanning October 2026 to March 2027. This is ₹24,417.73 crore more than the ₹37,952 crore provided for rabi 2025-26, a jump of roughly 64 per cent. Combined with ₹41,533.81 crore already earmarked for kharif 2026, the total phosphatic and potassic (P&K) subsidy for FY27 has crossed ₹1 lakh crore, against a budget allocation of ₹54,000 crore.
Per-nutrient rates have been revised sharply. Nitrogen subsidy rises to ₹94.21 per kg from ₹47.32 per kg in kharif 2026, sulphur to ₹10.42 per kg from ₹3.16 per kg, and phosphorus to ₹66.11 per kg from ₹52.76 per kg. Potash remains unchanged at ₹2.38 per kg, where it has stayed for several seasons. The government attributed the revision to international price trends for fertilisers and inputs, and to disruptions from the West Asia crisis.
Why It Matters For Business
Subsidy is paid to fertiliser companies so farmers receive nutrients below cost. A higher, pre-announced NBS rate reduces uncertainty for importers and manufacturers planning DAP, MOP, SSP and complex fertiliser supply ahead of sowing. The Cabinet also approved a sulphur package for domestic producers, covering 20 per cent of actual procurement cost of sulphur and sulphuric acid, subject to floor prices of $800 per tonne for sulphur and $266.67 per tonne for sulphuric acid. Detailed guidelines will follow from the Department of Fertilizers. The stated aim is to strengthen domestic output, cut import dependence, and nudge use of SSP over DAP and ammonium sulphate over urea.
Fiscal arithmetic is the immediate concern. Fertiliser subsidy was cut over 8 per cent in FY27 from ₹1.86 lakh crore in FY26, but the Iran war from February 28 reversed expectations of softer global prices. Spending in the six months to September has already crossed 70 per cent of FY27 budget estimates, per the Controller General of…
Services related to this update
Want this handled for you?
Get a free expert consultation and an exact quote within 24 hours.
Get free quote
