Union Budget 2026–27: FAI Calls for Targeted Reforms to Strengthen India’s Fertiliser Security
29 January 2026, New Delhi: Ahead of the Union Budget 2026–27, The Fertiliser Association of India (FAI) has urged the Government of India to adopt targeted policy and fiscal measures to safeguard fertiliser security, promote balanced nutrient application, and strengthen domestic manufacturing capacity in line with the vision of Atmanirbhar Bharat.
FAI noted that India’s record food grain production of 358 million tonnes in 2024–25 highlights the critical role fertilisers play in sustaining agricultural growth and food security. To maintain this trajectory, the industry emphasised the need to enhance nutrient use efficiency, encourage adoption of modern agricultural technologies, and ensure a stable and predictable policy environment amid rising input costs and increasing climate variability.
The association highlighted sustained volatility in global prices of key fertiliser inputs such as rock phosphate, phosphoric acid, ammonia, potash and sulphur, driven by geopolitical tensions, supply chain disruptions, and export restrictions by major producing countries. These factors have significantly increased production costs and import dependence. While timely government interventions—including supply arrangements with countries such as Morocco, Saudi Arabia and Qatar—have helped secure availability, continued uncertainty in international markets has dampened long-term investment sentiment.
Commenting on the cumulative impact of these challenges, Dr. Suresh Kumar Chaudhari, Director General, The Fertiliser Association of India, said that long-term fertiliser security depends on maintaining a careful balance between farmer affordability, manufacturer viability, and continuity of investment. He underscored that predictable subsidy frameworks, rational taxation, and timely policy interventions are essential to ensure uninterrupted nutrient availability while promoting efficient and sustainable fertiliser use.
FAI has called for sustained policy support to encourage fresh investments in indigenous phosphatic and potassic fertiliser capacity, backward integration projects, and strategic overseas sourcing, aligned with the objectives of Atmanirbhar Bharat and Make in India. The industry also highlighted the need for targeted incentives for acid and complex fertiliser plants to enhance efficiency, reduce emissions, and address environmental challenges related to phospho-gypsum disposal by promoting its use in construction, soil amendment, and industrial applications.
On the taxation front, the fertiliser industry has sought rationalisation of customs duties and GST provisions impacting key raw materials. Key recommendations include exemption or reduction of Basic Customs Duty on inputs such as ammonia, phosphoric acid, sulphuric acid, rock phosphate and sulphur; relief from the Agriculture Infrastructure and Development Cess; and resolution of inverted GST duty structures that lead to accumulation of unutilised input tax credit.
The industry has also proposed direct tax measures, including restoration of weighted deductions for R&D and farmer education, incentives for downstream fertiliser projects, accelerated depreciation for energy-efficient equipment, and simplification of compliance requirements to reduce litigation burdens.
FAI further stressed the importance of promoting balanced fertilisation to protect soil health, noting that price disparities between urea and phosphatic and potassic (P&K) fertilisers have distorted the N:P:K consumption ratio. Bringing urea under the nutrient-based subsidy framework, alongside promotion of innovative fertiliser products, bio-fertilisers, integrated nutrient management, and initiatives such as PM-PRANAM, would help correct price distortions and support more sustainable farming practices.
The fertiliser industry expressed confidence that incorporation of these recommendations in the Union Budget 2026–27 would enhance cost efficiency and financial viability, strengthen domestic manufacturing, reduce vulnerability to external supply shocks, and ensure uninterrupted fertiliser availability to Indian farmers—supporting long-term agricultural growth and national food security.
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