India’s fertiliser subsidy bill may overshoot budget as global prices surge
India has spent nearly 40 per cent of its annual fertiliser subsidy within just over three months of the fiscal year, owing to surging global prices and supply risks. The government is working to diversify import sources and ensure stable pricing for farmers, but the escalating subsidy bill could put pressure on the country’s finances.
A sharp acceleration in fertiliser subsidy spending by the government is pointing to renewed pressures on India’s fiscal position, with nearly 40 per cent of the annual allocation already expended within the first three-and-a-half months of the 2026-27 financial year.Escalating subsidy outgo amid global uncertaintyDepartment of Fertiliser to the Rajya Sabha, ₹70,709 crore has been disbursed as fertiliser subsidy so far in 2026-27 against a total budgeted allocation just below ₹1.8 lakh crore. This rapid pace of expenditure comes as global fertiliser markets remain volatile, with price spikes driven by ongoing geopolitical tensions in West Asia, including disruptions relating to the Strait of Hormuz.Times of India that actual spending on fertiliser subsidies last year touched ₹2.2 lakh crore, overshooting the revised estimate of about ₹1.9 lakh crore. This year’s trend suggests a repeat, with a senior official indicating that higher international prices for soil nutrients are likely to push the subsidy bill above the budgeted figure again, despite efforts to ramp up domestic production.Managing supply and pricing for farmersDiversifying import sources and strengthening supply chainsFiscal implications and the road aheadglobal prices remain high.Looking forward