India’s Fertilizer Subsidy Bill Could Cross ₹3 Lakh Crore This Fiscal Year
01 October 2026, New Delhi: India’s fertilizer subsidy bill for the current fiscal year could exceed 3 lakh crore rupees if global supply disruptions continue, nearly double the 1.71 lakh crore rupees originally budgeted, a senior official in the Department of Fertilisers has said, as rising international prices for urea and phosphatic nutrients push up the cost of keeping fertilizer affordable for Indian farmers.
Krishna Kant Pathak, Joint Secretary in the Department of Fertilisers, said at a briefing that the subsidy bill could be more than 3 lakh crore rupees if the problem persists, referring to sustained disruption in global fertilizer supply chains tied to ongoing instability in West Asia. Aparna S Sharma, Additional Secretary in the same department, separately acknowledged that costs for both urea and other fertilizers have been showing a clear upward trend, though officials stopped short of committing to a final figure given how much depends on how global markets move over the rest of the year.
The subsidy covers urea, di-ammonium phosphate (DAP), NPK complexes and single super phosphate (SSP), the main fertilizers India distributes to farmers at controlled retail prices well below their actual import or production cost. The government absorbs the difference as a subsidy, a mechanism designed to keep fertilizer affordable and shield farmers from the volatility of international commodity markets. When global prices for urea, DAP or the raw materials used to make them, including phosphoric acid and sulfur, rise sharply, the fiscal cost of maintaining that price shield rises with them, since retail prices to farmers typically do not move in step.
A Widening Gap Between Budget and Reality
Officials have pointed to the West Asia crisis as the central driver of the disruption, saying it has caused prolonged interruptions to global supply chains for urea, DAP and other soil nutrients that India depends on heavily through long-term international sourcing agreements. India imports a significant share of its phosphatic and potassic fertilizer needs and a portion of its urea requirement as well, meaning that any sustained spike in global benchmark prices translates fairly directly into higher landed costs for the government-backed import and distribution system, even before accounting for freight and currency effects.
The gap between the original budget estimate of 1.71 lakh crore rupees and a potential outturn above 3 lakh crore rupees would represent one of the larger subsidy overruns in recent years, reflecting how materially global input costs have moved since the budget was finalized. Officials have described a prior, less stressed baseline of around 2 lakh crore rupees for comparison, underscoring that even before the most recent round of global price pressure, the subsidy bill was already trending well above what had been planned for.
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