New Delhi: The government’s fertiliser subsidy bill for 2026-27 may surge by Rs 70,000 crore to Rs 2.41 lakh crore, driven by rising import costs of urea and other fertilisers amid the ongoing West Asia crisis, a senior official said on Monday.
Aparna S Sharma, Additional Secretary, Department of Fertilisers, on the sidelines of inter-ministerial briefing on West Asia developments, said, “The subsidy bill will go up, but what percentage is something I cannot say.”
On whether the increase could be as much as Rs 70,000 crore, she said, “Maybe.”
In April, the fertiliser ministry had projected an about 20% increase in the total subsidy for FY27.
India imports over 80% of its DAP requirements and for urea domestic production covers only 30-35% of total demand. India is among top fertiliser-importing countries in the world.
The official said the Centre is committed to ensure that there are sufficient fertiliser stocks, and available at affordable rates to farmers.
The government has scaled up imports to ensure adequate stocks ahead of the kharif sowing season for rice, maize, soy, and pulses.
The high subsidy outgo is due to both higher procurement volumes and jump in global prices and an increase in freight cost.
The FY27 budget estimated urea imports of 4.5 million tonne at $460 per tonne and DAP imports of 5.2 million tonne at $667 per tonne.
The ongoing West Asia crisis has pushed up the international prices of urea and DAP, along with key raw materials, such as ammonia, sulphur, phosphoric acid, and natural gas.
Since March 2026, urea prices have jumped 85% to $950/tonne, DAP rose by 30% to $900/tonne, ammonia prices are up 60% and sulphur prices are dearer by 50%, a recent report by CareEdge Ratings said.
Experts say such a spike in price was seen in FY23, during the Ukraine crisis, when fertiliser subsidy touched ?2.54 lakh crore.
India has imported 19.94 lakh tonnes of soil nutrients, including urea, DAP, NPK, since the beginning of the crisis.
Indian Potash Ltd recently contracted 1.35 million tonne of DAP at $930-$935 per tonne for delivery to India’s east and west coasts. This purchase, roughly a quarter of India’s annual DAP imports, was primarily sourced from Saudi Arabia, Russia Egypt and Morocco.
