Govt fertiliser subsidy bill likely to fall up to 34% this fiscal: minister

India has entered into long-term supply agreements with global suppliers for assured imports of fertilisers and raw materials at pre-determined prices

Representative image
Representative image


The government's fertiliser subsidy bill is likely to decline 30-34 per cent to Rs 1.7-1.8 lakh crore this fiscal owing to a fall in global prices and lower imports of urea, Union minister Mansukh Mandaviya said on Wednesday.

Asked about any adverse impact on imports resulting from problems with Red Sea shipping routes, the minister asserted "there is no shortage of fertilisers in the country".

Addressing a press conference, the chemicals and fertilisers minister highlighted that urea imports are estimated at 40-50 lakh tonne this fiscal, lower from around 75 lakh tonne imported the previous year, helped by higher domestic production and increased use of nano liquid urea.

"The ministry of external affairs is making necessary interventions and our navy is giving protection to Indian cargo vessels," Mandaviya told reporters about shipping operations in the Red Sea.

According to exporters, freight rates have skyrocketed by up to 600 per cent owing to the Red Sea crisis, which would hurt world trade. The geopolitical tension around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, has escalated thanks to recent attacks by Yemen-based Houthi militants.

Mandaviya also spoke about his new book Fertilising the Future: Bharat's March Towards Fertiliser Self-Sufficiency, and said there is sufficient availability of fertilisers in the country to meet the requirements of the kharif (summer cultivation) season.

At present, the country has stocks of 70 lakh tonne of urea, 20 lakh tonne of DAP, 10 lakh tonne of MoP (muriate of potash), 40 lakh tonne of NPK and 20 lakh tonne of SSP (single super phosphate).

Mandaviya highlighted that the government has taken several steps since 2014 to boost domestic production of fertilisers and reduce import dependence, and said four urea plants have already been revived and the fifth one will also begin production soon.

The minister said the Centre is also promoting an alternate fertilisers line — nano liquid urea and nano liquid DAP. Besides, it has launched a scheme to incentivise states that curb use of chemical fertilisers. India has entered into long-term supply agreements with global suppliers for assured imports of fertilisers and its raw materials at pre-determined prices, he added.

Asked about fertiliser subsidy, Mandaviya said the subsidy bill is estimated at around Rs 1.7-1.8 lakh crore. "Subsidy is expected to be lower this year because of fall in global prices. We have not increased retail prices to reduce subsidy," he said.

When the global rates skyrocketed during last fiscal, he said, the government increased subsidy and kept the retail prices of urea, diammonium phosphate (DAP) and other fertilisers steady in order to "protect farmers' interest".

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