Fertilizer Subsidy Bill Estimated to Rise to ₹3.50 Lakh Crore

26-May-2026 11:19 AM

New Delhi. India imports vast quantities of chemical fertilizers from abroad, and the Central Government provides substantial subsidies on these imports to ensure they are available to farmers at concessional rates.

The ongoing crisis in West Asia—coupled with the potential closure of the Strait of Hormuz—is not only disrupting fertilizer imports but is also driving up associated costs. Consequently, the rise in import expenditure will naturally lead to an increase in government subsidies.

Typically, the government subsidy on fertilizers for the financial year 2026-27 is projected to hover around ₹3 lakh crore; however, if the crisis in West Asia persists through the upcoming Rabi season, the fertilizer subsidy bill could surge to a peak level of ₹3.50 lakh crore.

This would place significant pressure on the government exchequer. To meet the requirements of the Kharif season, emphasis is being placed not only on boosting domestic production but also on increasing the import of fertilizers—albeit at higher costs—from abroad. This trend of imports is expected to continue, thereby sustaining the upward trajectory of the subsidy bill.