India's Fertilizer Subsidy Boost: Ensuring Affordable Nutrients for Farmers

In a significant move to support India's agricultural sector, the Union Cabinet has approved a substantial subsidy on phosphatic and potassic fertilizers for the upcoming Kharif season. This decision, announced on March 28, 2025, aims to ensure that farmers have access to essential nutrients at subsidized and affordable rates, bolstering India's food security and agricultural productivity.

Key Aspects of the Subsidy

The Cabinet, chaired by Prime Minister Narendra Modi, has allocated ₹37,216.15 crore for the Kharif season, which will run from April 1 to September 30, 2025. This move highlights the government's commitment to maintaining a balanced nutrient supply while keeping fertilizers affordable for farmers.

• Increased Allocation: The budgeted amount for the Kharif season is approximately ₹13,000 crore more than the allocation for the Rabi season of 2024-25, reflecting the government's proactive approach to address fluctuations in international fertilizer prices.
• Retail Price Stability: Information and Broadcasting Minister Ashwini Vaishnaw assured that the retail prices of DAP (Di-ammonium phosphate) will remain stable at current levels, providing relief to farmers amid volatile global markets.
• Nutrient-Based Subsidy (NBS) Scheme: The subsidy is part of the NBS scheme, which has been in place since April 2010. It ensures that fertilizers are subsidized based on their nutrient content, helping farmers make informed choices about their fertilizer usage.

Impact on Farmers and the Agriculture Sector

The decision to increase the subsidy on phosphatic and potassic fertilizers will have several positive impacts on farmers and the agricultural sector:

Benefits for Farmers

• Affordable Fertilizers: Farmers will continue to have access to subsidized P&K fertilizers, including NPKS grades, ensuring that essential nutrients are available at affordable prices.
• Freight Subsidy Extension: The existing freight subsidy on Single Super Phosphate (SSP) has been extended to the Kharif 2025 season, further reducing the cost burden on farmers.
• Soil Health and Productivity: By ensuring a balanced supply of nutrients, farmers can maintain soil health, leading to improved yields and better crop quality.

Contribution to National Food Security

• Stable Food Supply: The subsidy supports India's national food security by ensuring that farmers can produce high-quality crops at competitive prices.
• Market Price Stability: Keeping fertilizer prices in check helps maintain stability in the agricultural market, which is critical for food inflation control.

Implementation Strategy

The implementation of the NBS subsidy will involve providing support to fertilizer manufacturers and importers based on approved rates. This strategy ensures that prices remain stable for farmers while allowing manufacturers to purchase raw materials at competitive rates.

Key Features of the Subsidy Scheme

• Coverage of Nutrients: The subsidy covers a wide range of P&K fertilizers, offering farmers flexibility in choosing the nutrients they need.
• Market Dynamics: The government has factored in recent trends in international fertilizer prices to rationalize the subsidy, ensuring it remains effective in a volatile market environment.

Conclusion

The approval of a ₹37,216 crore subsidy for phosphatic and potassic fertilizers marks a significant step forward in India's agricultural policy, emphasizing the government's commitment to supporting farmers and enhancing national food security. As the country navigates global market challenges, this move will help ensure that farming remains a viable and productive sector.