India's Annual Fertiliser Subsidy Bill To Rise By 20%: How Does This Affect Farmers, Kharif Crop?

Last Updated:April 27, 2026, 18:02 IST

Despite global price rise, the Centre said is trying to ensure that domestic retail prices for farmers remain unchanged as India prepares for the upcoming kharif planting season

India is bracing for an increase of at least 20 percent in its annual fertiliser subsidy bill amid the ongoing West Asia conflict, which has continued to disrupt global supply chains and inflate the cost of essential agricultural inputs.

This is due to a sharp spike in global prices, particularly for urea and other key nutrients, which have nearly doubled in the last two months.

Despite these mounting costs, however, the Centre said is trying to ensure that domestic retail prices for farmers remain unchanged as India prepares for the upcoming kharif planting season. The ministry of fertilisers is moving to secure the domestic harvest by placing orders for record amounts of urea and nutrients.

India is the world’s largest importer of urea, and has contracted for a record 2.5 million metric tonnes of the fertiliser. This single purchase represents roughly a quarter of its annual import requirements and is expected to further tighten global supplies.

In total, the central government plans to import 64 lakh tonnes of urea and 19 lakh tonnes of other fertilisers, specifically for the kharif season so as to prevent any potential shortages. Aparna S Sharma, additional secretary in the department of fertilisers, said on Monday that the government is prioritising the stability of the agricultural sector.

“MRP of fertilisers like urea and DAP remain the same. There has been no change," Sharma said during an inter-ministerial briefing.

At present, urea continues to be sold to farmers at Rs 266.50 per 45 kg bag, while Di Ammonium Phosphate (DAP) is priced at Rs 1,350 per 50 kg bag. The government is effectively absorbing the doubled import costs by increasing corporate subsidies to companies that sell these nutrients to farmers below market rates.

Beyond imports, the government said it has decided to bolster domestic production that recently faced significant energy hurdles. In March, domestic urea output was hampered by a “force majeure" on gas deliveries, which caused plant utilisation rates to plummet to between 60 and 65 percent.

Officials said gas availability for urea units has since been restored to 97 percent capacity after the government authorised gas imports even at higher costs. Post-crisis domestic urea production has already reached 35.4 lakh tonnes.

They said inventory levels are reported to be strong and stable, with current supplies consistently exceeding the requirements for major crops. For the period between April 1 and 26, urea availability stood at 71.58 lakh tonnes against a requirement of 18.17 lakh tonnes.

Similarly, the officials said, DAP availability was recorded at 22.35 lakh tonnes compared to a requirement of 5.90 lakh tonnes. For the 2026 kharif season, an opening stock of 190.21 lakh tonnes is already in place representing nearly 49 percent of the total seasonal requirement.

While West Asia accounts for roughly half of India’s DAP and urea imports, with Saudi Arabia and Oman acting as primary suppliers, the government remains confident in its logistics.

“Most of the imports are out of the Strait of Hormuz. We are very much sure that we will be getting the supplies on time," Sharma said, highlighting the “strong, stable and well managed" status of India’s fertiliser security.

Last year, India’s fertiliser subsidy was estimated at Rs 1.87 trillion ($19.85 billion), a figure that is now set to significantly expand as the government continues to shield its farmers from global volatility.

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