With global non-urea fertiliser prices remaining elevated despite prospects of easing tensions in West Asia, Union Cabinet on Tuesday sharply raised per-kilogram (kg) subsidy rates under the nutrient-based subsidy (NBS) regime for the rabi 2026-27 season, compared with both kharif 2026-27 and rabi 2025-26. The revised rates entail an outlay of ₹62,370.02 crore, with sulphur attracting the steepest per-kilogram increase of more than 260 per cent from last rabi season.
The rabi subsidy, along with the ₹41,534 crore announced for kharif 2026-27, will take the total NBS allotment for FY27 to around ₹1.04 trillion, 92.41 per cent higher than the Budget Estimate (BE) of ₹54,000 crore.
Experts and industry players said the higher non-urea subsidy, when added to the increased urea subsidy could push the overall fertiliser subsidy bill in excess of ₹3 trillion. The FY27BE urea subsidy is ₹1.16 trillion.
The increase comes despite a 59 per cent moderation in global urea prices between May and September 2026, government efforts to curb the diversion of fertilisers for non-agricultural purposes. Agriculture is also facing the impact of El Niño this year.
The government has also notified a special package for sulphur to protect the industry from a sharp increase in input costs, with prices rising more than 213 per cent between September 2025 and September 2026.
“The (Narendra) Modi government has provided a shield to farmers from geopolitical turmoil,” Information and Broadcasting Minister Ashwini Vaishnaw told reporters, after the Union Cabinet approved the decision.
Under the revised rates, the per-kg subsidy on nitrogen has risen nearly 119 per cent from rabi 2025-26 to ₹94.21, while that on phosphorus has increased by around 38 per cent to ₹66.11.
Sulphur package and inclusion of TSP under NBS
The government has also notified a special package for sulphur under which domestic manufacturers will receive 20 per cent of their actual procurement cost, subject to a floor price of $800 per tonne. Sulphuric acid manufacturers will receive 20 per cent of their actual procurement cost, subject to a floor price of $266.67 per tonne.
In addition, the government has extended the special provisions applicable to di-ammonium phosphate (DAP) to imported triple super phosphate (TSP), domestically manufactured TSP and imported mono-ammonium phosphate (MAP).
Freight subsidy on single super phosphate (SSP) will also continue during rabi 2026-27 to promote it as an affordable alternative to DAP, the government said.
Industry welcomes the move
Industry welcomed the sharp increase in non-urea fertiliser subsidy rates and the special package for sulphur, saying the measures would help moderate retail prices of complex fertilisers such as NP and NPKS (nitrogen, phosphorus, potassium and sulphur), which have risen by around 40-50 per cent, and improve domestic production.
Data shows that domestic production of complex fertilisers fell 43.4 per cent in September 2026 to 0.59 million tonnes, against a target of 1.06 million tonnes, as relatively low subsidy during the kharif season discouraged manufacturers from producing them.
“NBS rates are generally based on a six-month average of international prices, but the previous revision had not adequately captured the sharp increase in input costs. In the absence of adequate subsidy support, fertiliser companies had been forced to increase the prices of complex fertilisers, particularly NP and NPK grades,” S Sankarasubramanian, chairman of the Fertiliser Association of India (FAI), told Business Standard.
He said NP and NPKS fertilisers were important for balanced nutrient application as they contained multiple nutrients. The industry had also been forced to cut production as rising input costs made manufacturing economically unviable.
The sharp increase in sulphur prices had further added to the industry’s difficulties.
“The latest revision would enable the industry to pass on some price corrections in NP and NPK fertilisers and help make these products more affordable for farmers, while also encouraging them to move towards balanced nutrient application rather than overusing DAP,” Sankarasubramanian said.
Traditionally, India’s fertiliser consumption pattern had been relatively balanced, with NP and NPK fertilisers accounting for around 60 per cent and DAP for approximately 40 per cent.
However, over the past two seasons, higher government support for DAP had encouraged farmers to shift towards greater consumption of the phosphatic fertiliser. With the revised subsidy rates making NPK fertilisers more affordable, the consumption pattern is expected to become more balanced, the FAI chairman added.
