The Indian government’s budget for the fiscal year 2025-26 allocates ₹1.84 trillion for fertilizer subsidies, a slight decrease from the revised estimate of ₹1.89 trillion in FY 2024-25. This reduction reflects the government’s ongoing efforts to manage fiscal expenditure while supporting the agricultural sector.
Urea Subsidy:
The budget earmarks ₹1.19 trillion for urea subsidies in FY 2025-26, maintaining a level similar to the previous year’s allocation of ₹1.189 trillion. This consistency underscores the government’s commitment to ensuring the availability of urea, a critical input for Indian agriculture.
Nutrient-Based Subsidy for P&K Fertilizers:
For phosphatic and potassic (P&K) fertilizers, the nutrient-based subsidy is set at ₹0.49 trillion, representing a 5.76% decrease from the prior year’s allocation of ₹0.52 trillion. This adjustment aligns with the government’s strategy to optimize subsidy distribution and encourage balanced fertilizer use.
Dependence on Imports:
Despite strides toward self-sufficiency in urea production, India continues to rely on imports to meet its demand for raw materials like rock phosphate and potash, essential for manufacturing P&K fertilizers. This dependency highlights the need for strategies to secure these critical inputs.
New Urea Plant in Assam:
In a move to bolster domestic urea production and cater to the northeastern states, the government has announced the establishment of a urea plant in Namrup, Assam, with a capacity of 1.27 million tons. This initiative aims to enhance regional fertilizer availability and reduce transportation costs.
These budgetary decisions reflect the government’s balanced approach to supporting the agricultural sector while managing fiscal responsibilities.
