The Union Cabinet has approved a budgetary provision of Rs 62,370.02 crore for providing nutrient-based subsidies on phosphatic and potassic (P&K) fertilisers during the Rabi 2026-27 season, marking an increase of Rs 24,417.73 crore, or around 64.3%, over the previous Rabi season. The higher allocation comes amid changes in international prices of fertilisers and key inputs, including urea, di-ammonium phosphate (DAP), muriate of potash (MOP) and sulphur.
The decision, taken at a Cabinet meeting chaired by Prime Minister Narendra Modi, covers the period from October 1, 2026, to March 31, 2027. The budgetary requirement for the Rabi 2025-26 season was Rs 37,952.29 crore.
The government said the approved Nutrient Based Subsidy (NBS) rates would help ensure the availability of P&K fertilisers, including DAP and various grades of NPKS, to farmers at affordable and reasonable prices. The revised rates are also intended to rationalise subsidies in line with recent movements in international fertiliser and input prices.
Under the decision, fertiliser companies will receive subsidies at the approved and notified rates, enabling them to make these fertilisers available to farmers at subsidised prices. The subsidy will cover the 28 grades of P&K fertilisers currently being supplied to farmers through fertiliser manufacturers and importers.
The subsidy on P&K fertilisers is administered under the Nutrient Based Subsidy Scheme, which came into effect on April 1, 2010. Under the scheme, subsidy is determined on the basis of the nutrient content of fertilisers rather than through a uniform product-based subsidy.
The scheme covers four primary nutrients: nitrogen (N), phosphate (P), potash (K) and sulphur (S). DAP and different NPKS grades are among the major fertilisers supplied under the programme.
The government periodically revises NBS rates, taking into account international prices of fertilisers and their raw materials and intermediates. The objective is to ensure that fertiliser companies can supply these products to farmers at subsidised prices while adjusting government support to changing input costs.
India depends significantly on imports for meeting its requirements of phosphatic and potassic fertilisers and their raw materials. Consequently, fluctuations in global prices of DAP, MOP, phosphoric acid, ammonia and sulphur can have a substantial bearing on domestic subsidy requirements.
The latest Cabinet approval seeks to maintain the affordability and availability of P&K fertilisers during the six-month Rabi season, when crops such as wheat, mustard, pulses and other winter crops require adequate nutrient supplies.
Hailing the decision, fertiliser industry body Fertiliser Association of India (FAI) said the government's allocation of Rs 62,370 crore in subsidies for phosphatic and potassic (P&K) fertilisers during the Rabi season would help ensure adequate supplies of affordable non-urea fertilisers to farmers. In a statement, FAI Chairman S Sankarasubramanian described the decision as timely and positive.
"The revision in NBS rates for Rabi 2026-27, along with the various support measures undertaken during the year, demonstrates the government's strong commitment to protecting farmers from volatility in global fertiliser and raw material markets," he said.