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Cabinet raises fertilizer subsidy support for the Rabi growing season

English हिंदी ಕನ್ನಡ മലയാളം தமிழ் తెలుగు

First brief 12 Nov, 2:29 pm IST Updated 12 Nov, 2:29 pm IST 0 developments 2 min read

Wheat field, Haryana; file photo — Aman Rania · CC0

Where it stands

The Cabinet approved a larger subsidy budget for phosphatic and potassic fertilizers on 11 November 2026. The support applies to the Rabi season from 1 October 2026 to 31 March 2027. The tentative budget is about ₹62,370 crore, compared with about ₹37,952 crore for the previous Rabi season. The government pays this subsidy to fertilizer manufacturers and importers. Under the nutrient-based subsidy system, support depends on the nutrients contained in a fertilizer. The payment helps meet part of the supply cost so farmers can buy these fertilizers at more affordable prices. For a farmer, the relevant outcome is the price and availability of the fertilizer actually needed. A larger subsidy budget can help cushion higher supply costs. It is not a cash payment of that amount to farmers or an equivalent percentage reduction in every bag’s price. The Cabinet release approves the seasonal support without announcing a single new retail price for all covered fertilizers.

Background

Crops draw nutrients from the soil as they grow. Fertilizers supply nutrients that the soil may not provide in sufficient amounts. Different products contain different combinations, so their nutrient content matters as well as the weight of the bag. India imports some fertilizers and some of the raw materials used to manufacture them. Changes in international prices can therefore raise the cost of supplying fertilizers domestically. Passing the entire increase to farmers would raise cultivation costs. The nutrient-based subsidy system addresses part of this pressure for phosphatic and potassic fertilizers. It fixes support according to the quantities of nitrogen, phosphorus, potassium and sulphur in covered products. Manufacturers and importers receive the subsidy, while farmers pay the retail price. The government reviews the support for each season using factors including international fertilizer and raw-material prices. This links the budget decision to the cost of making fertilizers available during the crop cycle. Fertilizer companies set prices within the applicable oversight framework.

How it developed

11 November 2026

How it started
Seasonal support increases as fertilizer costs put pressure on supply

The Cabinet approved nutrient-based subsidy rates for covered phosphatic and potassic fertilizers for Rabi 2026–27. The tentative spending provision rises to about ₹62,370 crore from about ₹37,952 crore a year earlier. The support covers the season beginning on 1 October. The decision funds part of the cost borne by suppliers. Its intended benefit reaches farmers through more affordable fertilizer supply. Actual prices still depend on the product, its nutrient content and the applicable pricing arrangements.

Government of India / PIB Government of India / PIB Business Standard

Why it matters for UPSC

GS3 · Agricultural subsidiesGS3 · Farm input costs

For GS3, trace a fertilizer price shock from imports to farm costs and government subsidy spending. Distinguish nutrient-based support for P&K fertilizers from the separate urea pricing system.

Key terms

Rabi seasonThe crop-growing season generally associated with sowing after the monsoon and harvesting in spring. Wheat is a major Rabi crop. This subsidy decision covers the specified period from 1 October 2026 to 31 March 2027.

Nutrient-based subsidyGovernment support calculated using the nutrient content of covered fertilizers. Different amounts of nitrogen, phosphorus, potassium and sulphur lead to different subsidy amounts. Manufacturers and importers receive the support, which helps keep farmer prices affordable.

Phosphatic and potassic fertilizersFertilizers supplying phosphorus or potassium, including products that combine several nutrients. They fall within the covered P&K subsidy framework. A bag’s composition helps determine the subsidy applicable to it.

DAPDiammonium phosphate, a fertilizer that supplies nitrogen and phosphorus. It is one of the products covered by the nutrient-based subsidy system. Its retail price is distinct from the government’s subsidy payment to the supplier.

NPKSNitrogen, phosphorus, potassium and sulphur. These are the nutrients used in the subsidy calculation. Fertilizer grades indicate the proportions of nutrients in a product, allowing support to reflect its composition.

Subsidy budgetThe amount set aside to finance government support under a scheme. A larger seasonal provision can help meet higher supply costs. It should be distinguished from the price a farmer pays for an individual bag.

Sources (3)

Government of India / PIB · official · Rabi 2026–27 nutrient-based fertilizer subsidy approved12 Nov, 1:41 pm
Government of India / PIB · official · How nutrient-based subsidy supports P&K fertilizer prices12 Nov, 1:41 pm
Business Standard · Non-urea fertilizer subsidy increased for Rabi12 Nov, 1:41 pm