Cabinet clears Rs 41,534 crore fertiliser subsidy for kharif 2026

New Delhi: The Union cabinet on Wednesday approved nutrient-based subsidy (NBS) rates for phosphatic and potassic (P&K) fertilisers for the upcoming kharif 2026 season, allocating Rs 41,534 crore to support farmers.

The allocation is higher than the Rs 37,216 crore earmarked for kharif 2025, reflecting increased global prices of key inputs such as urea, DAP, MOP and sulphur, the government said in a statement.

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The approved subsidy rates will be applicable from April 1 to September 30, covering a range of P&K fertilisers, including DAP and NPK grades. Under the scheme, subsidies are provided to fertiliser manufacturers and importers to ensure that farmers receive nutrients at affordable prices.

The government currently offers 28 grades of P&K fertilisers under the NBS regime, which has been in place since April 2010. Officials said the move is aimed at insulating farmers from volatility in international fertiliser markets while ensuring adequate availability during the peak sowing season.

The Centre reiterated its commitment to maintaining a steady supply of fertilisers at reasonable prices, particularly as input costs remain elevated globally, to support agricultural production and farmer incomes.

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India's dependence on fertiliser imports remains high, as about 20% of urea and one-third of complex fertilisers, primarily diammonium phosphate (DAP), are imported mainly from West Asia. However, immediate demand for DAP from India in the global markets has been limited as domestic buyers were awaiting clarity on a government nutrient-based subsidy before committing to fresh purchases.

According to a report by Crisil Ratings India's fertiliser subsidy bill could increase Rs 20,000-25,000 crore, up 12-15% from initial estimates of Rs 1.71 lakh crore for 2026-27, if the West Asia conflict persists.