India expects annual fertiliser subsidy bill to rise by 20%

India expects ​its fertiliser subsidy bill ​to jump by about 20% for ​the current financial year because of price rises fuelled by the Middle East crisis, fertiliser ministry official Aparna Sharma said on Monday. India, the ‌world's ⁠largest importer ⁠of urea, has placed orders to import a record 2.5 ​million metric tons of the fertiliser at nearly double the price ​paid two months ago as the Iran conflict disrupts global supplies and drives up prices.

The record purchases, ​about a quarter of India's annual imports, ⁠are expected ‌to tighten global supply and ​push prices higher, ​potentially raising future import costs for ⁠New Delhi.

Rising import costs are likely to ​increase India's fertiliser subsidies to companies for selling ​crop nutrients to farmers below market prices.


India's fertiliser subsidy for the financial year to the end of last March is estimated at about 1.87 trillion rupees ($19.85 billion).

India imports fertilisers such as urea, diammonium ‌phosphate (DAP) and muriate of potash, as well as liquefied natural gas, a key feedstock for ​urea production.

The ​Middle East ⁠accounts for roughly half of India's DAP and urea imports, with Saudi Arabia the largest DAP supplier and Oman the ​biggest urea supplier.

India holds higher fertiliser stocks, but demand tends to surge in June and July, when farmers begin planting crops such as rice, corn, cotton and oilseeds.