India's Fertiliser Subsidy Bill Set to Soar Amid West Asia Crisis

India's fertiliser subsidy bill could cross Rs 3 lakh crore in the current fiscal if the disruptions resulting from the West Asia crisis prolong, a senior government official has said.

The budgetary allocation for fertiliser subsidies in 2026-27 stands at Rs 1.71 lakh crore, but the subsidy bill is set to rise due to a sharp increase in prices of urea, Di-Ammonium Phosphate (DAP) and other soil-nutrients in the global market.

At a conference organised by the Indian Council for Research on International Economic Relations (ICRIER) on Monday, Krishna Kant Pathak, joint secretary in the Department of Fertilizers, asserted that the government currently has sufficient stocks of fertilisers, almost 20 million tonnes.

He informed that the fertilisers are being sourced from different countries through long-term agreements.

''But, it has a cost. The cost, which prior to this war situation was almost Rs 2 lakh crore in subsidies. It will grow substantially, and it will be a burden for us,'' Pathak said at the event, the video of which was released on the ICRIR website.

''...it (fertiliser subsidy) could be more than Rs 3 lakh crore if the problem persists,'' the joint secretary said.

It is difficult to project the total subsidy bill at this stage, he said.

Pathak was speaking at a roundtable discussion on 'De-risking India's Fertiliser Supply Chain and Demand Management Amid Rising Geopolitical Risks'.

India consumes around 70 million tonnes of fertilisers annually, he pointed out.

Pathak also expressed concern over the diversion of urea for industrial usage.

On Monday, the Centre asserted that there is adequate availability of fertilisers in the country to meet the demand for soil nutrients during the upcoming Kharif (summer-sown) season.

At an inter-ministerial briefing on West Asia developments, Aparna S Sharma, Additional Secretary, Department of Fertilizers, said the domestic output post-crisis has been good, and the country is also importing fertilisers to ensure sufficient supply.

''The overall stock position of fertiliser in the country remains comfortable,'' she said.

Against the assessment of 390.54 lakh tonne of fertiliser for the Kharif season this year, the stock as of date is 200.12 lakh tonne, the secretary said.

According to Sharma, the fertiliser stock is more than 50 per cent of projected Kharif demand, significantly higher than the usual 33 per cent.

The Department of Agriculture has assessed the fertiliser requirement for Kharif 2026 at 390.54 lakh tonne. The Kharif sowing operation will begin in June.

Sharma also highlighted that the domestic production and import of fertilisers after the crisis have been substantial.

The total domestic production has been about 95 lakh tonne, and about 22.60 lakh tonne of imports have reached Indian shores. So, a total of 117.6 lakh tonne of fertilisers have been added to the stock.

''This will ensure adequate availability during the peak Kharif season,'' Sharma said.

In 2025, nearly 73 per cent of the country's total fertiliser requirement was met through domestic production.

The total domestic production of fertilisers, including urea, DAP, NPKs and SSP, has increased from 433.29 lakh tonne in 2021 to a record 524.62 lakh tonne in 2025.

India imports a large quantity of urea and diammonium phosphate (DAP) to meet local demand.

The country's urea production has increased from 225 lakh tonne during 2014-15 to 306.67 lakh tonne in 2024-25. The country imported more than 100 lakh tonne of urea last fiscal to meet local demand.

At present, the MRP of neem-coated urea is Rs 242 per bag (45kg), while the DAP is being sold at Rs 1,350 per bag (50kg).

(With inputs from agencies.)