Approval & Allocation
- ₹37,216 crore allocated for the first half of FY26 (H1FY26).
- 41% increase in per kg subsidy on phosphorus (P) compared to Rabi FY25.
- Total fertilizer subsidy for FY25 revised to ₹1.91 trillion, up 14% from the budget estimate of ₹1.68 trillion.
Impact on DAP & Other Fertilizers
- Despite the increase, companies still face a ₹1,000 per tonne loss on DAP imports at current prices.
- Phosphorus subsidy increase benefits multiple fertilizers beyond DAP, including NP and NPK grades.
- DAP subsidy raised from ₹25,411 per tonne to ₹27,800 per tonne for Kharif 2025.
Market & Industry Reactions
- Government aims to stabilize fertilizer prices—no hike in DAP retail rates since 2014, absorbing costs via subsidies.
- ICRA estimates losses on DAP imports will shrink from ₹4,000 per tonne to ₹1,000 per tonne due to revised subsidy rates and rupee appreciation.
Nutrient-Based Subsidy (NBS) Rates for Kharif 2025-26 (₹/kg)
| Nutrient | Kharif FY25 | Rabi FY25 | Kharif FY26 | % Change YoY (Kharif FY25 vs. FY26) | % Change (Rabi FY25 vs. Kharif FY26) |
|---|---|---|---|---|---|
| Nitrogen (N) | 47.02 | 43.02 | 43.02 | -8.51% | 0.00% |
| Phosphorus (P) | 28.72 | 30.8 | 43.6 | 51.81% | 41.56% |
| Potassium (K) | 2.38 | 2.38 | 2.38 | 0.00% | 0.00% |
| Sulphur (S) | 1.89 | 1.76 | 2.61 | 38.10% | 48.30% |
- The higher phosphorus subsidy reduces industry losses and benefits multiple fertilizers.
- The total fertilizer subsidy for FY26 is expected to remain high given volatile global input prices.
- Potential price reductions in global markets could further ease the burden on fertilizer companies.
