Rabi 2026-27 Fertiliser Subsidy of ₹62,370 Crore: Why the Bill Has Shot Past the Budget
The Union Cabinet approved a subsidy of ₹62,370.02 crore on phosphatic and potassic (P&K) fertilisers for the rabi season 2026-27 (October 2026 to March 2027). This is about 64% more than the ₹37,952 crore given for rabi 2025-26.
New Nutrient Based Subsidy (NBS) rates per kg: nitrogen (N) ₹94.21 (up from ₹47.32 in kharif 2026), phosphorus (P) ₹66.11 (from ₹52.76), sulphur (S) ₹10.42 (from ₹3.16). Potash (K) stays at ₹2.38.
With ₹41,533.81 crore already given for kharif 2026, P&K subsidy for 2026-27 has crossed ₹1 lakh crore, against a budget estimate of about ₹54,000 crore. The total fertiliser subsidy budget for 2026-27 (including urea) was about ₹1.71 lakh crore, and the actual bill may go much higher.
The government linked the rise to high global prices of fertilisers, gas and raw materials after the West Asia crisis. Spending on fertiliser subsidy had already crossed 70% of the full-year budget by September, as per the Controller General of Accounts.
The Cabinet also approved a sulphur package: domestic makers will get 20% of the actual cost of buying sulphur and sulphuric acid. This is meant to cut imports and promote alternatives like SSP instead of DAP and ammonium sulphate instead of urea.
Special support will continue so that DAP sells at ₹1,350 per 50-kg bag. This support also covers TSP and imported MAP. The freight subsidy on SSP and the subsidy on ammonium sulphate also continue.
Nutrient Based Subsidy (NBS) Scheme
The Nutrient Based Subsidy (NBS) Scheme is the system India uses to give subsidy on fertilisers other than urea, mainly phosphatic (P) and potassic (K) fertilisers like DAP (di-ammonium phosphate) and MOP (muriate of potash). The government fixes a subsidy for each kilogram of nutrient (nitrogen, phosphorus, potash and sulphur) inside a fertiliser. A fertiliser bag's total subsidy depends on how much of each nutrient it contains. Companies are, in principle, free to set the retail price.
Global prices of P and K fertilisers and their raw materials rose sharply, so the Cabinet raised the per-kg NBS rates (doubling nitrogen and tripling sulphur). This keeps farm prices stable but has pushed the subsidy far beyond the budget.
Urea Subsidy Scheme: How India Keeps Urea Cheap
Urea is the most used fertiliser in India. It gives plants nitrogen, the nutrient that makes leaves green and helps crops grow fast. The government fixes a very low price for urea and pays the companies the rest of their cost as subsidy. Because urea is made from natural gas (LNG), a rise in global gas prices directly raises the subsidy bill.
High global prices of urea and LNG mean the urea subsidy will also overshoot its budget, along with the P&K subsidy approved now. Promoting ammonium sulphate as an alternative to urea is one way the government hopes to reduce this dependence.
Balanced Fertilisation and the NPK Ratio
Balanced fertilisation means giving the soil the right nutrients, in the right amounts and the right proportion, based on what the soil lacks and what the crop needs. The best-known measure is the NPK ratio: how much nitrogen (N), phosphorus (P) and potash (K) farmers use compared with each other. A ratio of about 4:2:1 is commonly treated as the ideal for Indian conditions, but actual use in India is heavily tilted towards nitrogen.
The new sulphur package and the tripling of the sulphur subsidy aim to make SSP and ammonium sulphate more attractive. This supports more balanced use of nutrients and less reliance on imported DAP and urea.
- Rabi 2026-27 P&K subsidy: ₹62,370.02 crore (about 64% above rabi 2025-26's ₹37,952 crore)
- Kharif 2026 P&K subsidy: ₹41,533.81 crore; FY27 P&K total above ₹1 lakh crore vs budget of about ₹54,000 crore
- NBS rabi 2026-27 rates per kg: N ₹94.21, P ₹66.11, K ₹2.38, S ₹10.42
- Kharif 2026 rates per kg: N ₹47.32, P ₹52.76, K ₹2.38, S ₹3.16
- Total fertiliser subsidy budget FY27: about ₹1.71 lakh crore (urea about ₹1.17 lakh crore); FY26 was about ₹1.86 lakh crore
- Sulphur package: 20% of actual procurement cost of sulphur and sulphuric acid for domestic makers
- DAP price held at ₹1,350 per 50-kg bag
- Rabi 2026-27 demand estimate: about 350 lakh tonnes (urea 199.27 lt, DAP 55.07 lt, complex 79.12 lt, MOP 16.4 lt)
- Fertiliser stocks on 10 November 2026: 235.21 lakh tonnes (vs 173.46 lt a year earlier)