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India's Fertiliser Subsidy Architecture

India operates a dual-track fertiliser subsidy system: a fixed Maximum Retail Price (MRP) system for urea, and a Nutrient Based Subsidy (NBS) scheme for phosphatic and potassic (P&K) fertilisers. In both cases, subsidies currently flow to manufacturers and importers, who sell to farmers at controlled or subsidised prices; the government then reimburses the companies.

Key details

Urea (most used fertiliser): Price controlled by government; current MRP is approximately Rs 242/45-kg bag (heavily subsidised); manufacturers reimbursed by Department of Fertilizers, Ministry of Chemicals and Fertilizers
NBS Scheme (launched April 2010): Fixed subsidy per kg of nutrient (N, P, K, S) paid to manufacturers of 28 grades of P&K fertilisers; companies can price these at market rates above the subsidy baseline
DBT in fertilisers (since 2018): A partial DBT is already operational — the subsidy is released to manufacturers only after verified retail sales to farmers using their Aadhaar-linked Point of Sale (PoS) machines at retail outlets
Annual fertiliser subsidy: Approximately Rs 1.7-1.9 lakh crore (varies year to year based on international prices)
Nodal Ministry: Department of Fertilizers, Ministry of Chemicals and Fertilizers

In the news

● Tracked since February 25, 2026 · last seen September 14, 2026 · updates as the daily brief publishes

14 Sep '26

Direct Benefit Transfers Cross Rs 2.08 Lakh Crore in FY27, Led by Fertiliser Subsidy

Economics

15 Jun '26

India's Fertiliser Subsidy Regime: Structural Inefficiencies and the Case for Reform

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25 May '26

India's Fertiliser Subsidy Bill May Cross ₹3 Lakh Crore in FY27 Amid Global Supply Disruptions

Economics

15 May '26