The government may reassess the fertiliser subsidy budget for the current fiscal year following a softening of urea prices in the latest tender floated for soil nutrient imports, Aparna S Sharma, Additional Secretary, Department of Fertilisers, said on Thursday.
“Whatever is indicated (the lower price bid in the urea tender) is based on preliminary estimates. “Presuming that trends remain the same, there is a definite case to reassess the fertiliser subsidy depending on the confirmation of the quantities to be imported,” Sharma said.
“Our stock position and production are proceeding seamlessly, which may indicate that India’s requirements will be less while several factors such as consumption and stock position impact global prices,” she stated.
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Dramatic Price Drops
This follows National Fertilizers, one of the agencies responsible for soil nutrient imports, receiving a much lower bid—a landed cost between $444.9/tonne and $449.3/tonne—for importing 1.7 million tonnes (MT) of urea. This is less than half the contracted bids in the range of $935/tonne – $959/tonne for an earlier tender issued by Indian Potash for the import of 2.5 MT of urea.
Earlier, a senior official said the fertiliser department projected subsidy requirements of up to Rs 3.4 lakh crore in FY27, compared with the budgeted Rs 1.71 lakh crore, as global fertiliser prices remain elevated and supplies have become increasingly constrained by disruptions in the Strait of Hormuz and damage to production facilities amid the US-Israel-Iran war.
In FY26, expenditure on fertiliser subsidies was Rs 2.17 lakh crore – Rs 1.42 lakh crore for urea and Rs 74,999 crore for nutrient-based subsidy. This was a 17% increase over the revised estimate of Rs 1.86 lakh crore. This, according to officials, was due to the rise in fertiliser prices from March 2026.
Kharif Stock Comfort
Against the fertiliser requirement of 38.39 MT for the kharif season, the current government stock is around 19.57 MT or 51% of the total requirement. Sharma said that farmers have purchased 9.46 MT of various soil nutrients so far, or 25% of the total requirement. She stated that since the West Asia conflict began in February, domestic urea production has been 7.1 MT while 15.3 MT of all variants of soil nutrients have been added to stocks through domestic production and imports.
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As part of diversification of imports, the official of the deparment said urea is currently sourced from Oman, Malaysia, Vietnam, Georgia, Nigeria, Russia, Finland, Egypt, Algeria, Turkey, and the Netherlands. Import of other variants diammonium phosphate (DAP) and NPKs were procured from Russia, Morocco, Egypt, USA, Jordan, South Korea, Tunisia, and Saudi Arabia via the Red Sea.
TOPICSFertilisersThis article was first uploaded on June eleven, twenty twenty-six, at fifty-one minutes past six in the evening. © The Indian Express (P) Ltd