ALSO READKhaif output to match last year’s level: Secretary
It has requested states to ensure installation of GPS tracking on all vehicles transporting fertilisers from ports and railways to the companies, to ensure that highly subsidised fertiliser — urea, DAP, nitrogen, phosphorus and potassium (NPK), and potash — are not diverted for industrial use.
At the national conference on agriculture to devise a strategy for rabi crops, Rajat Kumar Mishra, secretary, Department of Fertilisers, said, “Promotion of rational use of fertilizers is paramount to deal with external shocks due to geo-political factors, as the country imports a substantial volume of raw material for fertilizer manufacturers and finished products.”
According to official data, in the current kharif season since April, consumption of fertilisers such as urea, NPK, and single super phosphate (SSP) has increased by 0.8 million tonnes (MT), 1 MT, and 0.5 MT, respectively, compared to the 2024 kharif season.
Sources said that while urea consumption has increased to 18.2 MT in the current kharif season from 17.4 MT in 2024, due to higher sowing of maize, sugarcane, and paddy, there have been several reports of highly subsidised urea being diverted for non-agricultural use.
Supply and Subsidy Concerns
On fertiliser and nutrient supply in the forthcoming rabi season, agriculture minister Shivraj Singh Chouhan stated that rainfall and other factors often cause changes in crop patterns. “This year, good rainfall has led to increased sown area, which could raise demand for fertilisers,” Chouhan said, adding that soil nutrients will be supplied in totality as per demand from states, in collaboration with the fertilizers ministry.
While 87% of the annual urea demand — 38.79 MT in FY25 — is met locally, India imports a significant volume of natural gas for making urea, as 30 out of 32 urea units use natural gas.
Of the annual 10–11 MT of DAP demand, 60% is met through imports. Domestic manufacturing of DAP also depends on imported rock phosphate. Potash is 100% imported.
Since 2012, the retail urea price has been Rs 242 per 45 kg bag, even as the cost of production is over Rs 2,600 a bag. While the government covers the cost difference via subsidy to manufacturers, the low retail price has led to overuse of urea, contributing to a decline in soil health.
ALSO READGovt projects a modest 2.4% growth in foodgrains production in 2025-26
Retail prices of P&K fertilisers, including DAP, were ‘decontrolled’ in 2010 with the introduction of a ‘fixed-subsidy’ regime as part of the Nutrient Based Subsidy mechanism.
Due to a rise in global fertiliser prices, fertiliser subsidy in FY25 was revised to Rs 1.91 lakh crore from the budget estimate of Rs 1.68 lakh crore. As per the budget estimates of 2025–26, Rs 1.67 lakh crore has been allocated for fertiliser subsidy.