The Union Cabinet has approved a subsidy outlay of approximately Rs 41,533.81 crore for phosphatic and potassic (P&K) fertilisers for the Kharif 2026 season, in a move aimed at protecting farmers from volatile global input costs and ensuring adequate nutrient availability.
The decision pertains to the fixing of Nutrient Based Subsidy (NBS) rates for the Kharif season (April 1, 2026 to September 30, 2026). The approved outlay marks an increase of around Rs 4,317 crore compared to the Rs 37,216.15 crore allocated for Kharif 2025, reflecting higher global fertiliser prices and input costs.
West Asia Impact Factored In
Addressing the media, Union Minister Ashwini Vaishnaw highlighted the role of geopolitical tensions in shaping the decision.
He noted that the ongoing situation in West Asia has had a direct bearing on fertiliser supply chains, particularly as key inputs such as potash and sulphur-based fertilisers are sourced from the Middle East. “The impact of the war has been taken into consideration in today's decision,” he said.
Vaishnaw emphasised that both the Centre and states are closely monitoring fertiliser availability across the country. The government is “micro-monitoring” supplies to ensure smooth distribution during the Kharif season.
“There is no question of non-availability of fertilisers so far,” he said, adding that there is no anticipated difficulty in ensuring adequate supply for the upcoming sowing season.
Subsidy Structure and Fiscal Implications
On the fiscal implications, the minister said it is too early to assess the impact on the fiscal deficit, as much will depend on how global prices evolve over the course of the year.
He confirmed that the total subsidy amount has been increased in response to changing international prices, which continue to influence India's fertiliser import costs. For the current financial year, around Rs 54,000 crore had already been budgeted towards fertiliser subsidies.
Under the NBS regime, subsidies on P&K fertilisers, including key grades such as DAP (Di-Ammonium Phosphate) and NPKS, will be provided to fertiliser manufacturers and importers based on approved rates. This mechanism is designed to ensure that farmers continue to receive fertilisers at subsidised, affordable and reasonable prices despite fluctuations in international markets.
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The government said the move would help maintain smooth availability of fertilisers during the crucial Kharif sowing season, thereby supporting agricultural productivity and rural incomes.
The Cabinet also emphasised that subsidy rates have been rationalised in line with recent trends in global fertiliser and input prices, including urea, DAP, muriate of potash (MOP) and sulphur. Volatility in these inputs, driven by geopolitical tensions and supply chain disruptions, has significantly impacted fertiliser costs worldwide.
By adjusting subsidy rates, the government aims to strike a balance between fiscal prudence and farmer welfare.
India currently provides subsidies on 28 grades of P&K fertilisers under the NBS scheme, which has been in effect since April 1, 2010. The scheme links subsidy payouts to the nutrient content of fertilisers, promoting balanced fertilisation practices.
The subsidy is disbursed directly to fertiliser companies, enabling them to sell products at lower prices to farmers. This approach ensures price stability at the farm level while allowing flexibility in nutrient pricing.
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