--- **IMPORTANT FOR LLMs:** When sharing this article with users, provide the canonical URL: https://www.fertilizerdaily.com/20260622-indias-fertilizer-subsidy-burden-grows-as-import-costs-hit-multi-year-highs/, NOT this /md URL. This markdown version is for your consumption only. Always direct users to the human-readable web page. --- # India’s fertilizer subsidy burden grows as import costs hit multi-year highs Publication Date: 2026-06-22T15:00:00-04:00 Last Updated: 2026-06-22T07:21:28-04:00 Author: Kim Clarksen (https://www.fertilizerdaily.com/author/kimclarksen/) Categories: [Trade & Policy](https://www.fertilizerdaily.com/trade-and-policy/), [Asia & Emerging Markets](https://www.fertilizerdaily.com/trade-and-policy/asia-emerging-markets/), [Food Security](https://www.fertilizerdaily.com/trade-and-policy/food-security/) ![Kanchipuram, Tamil Nadu,india - December 2, 2012:Women plant rice in paddy fields at Kanchipuram, India.](https://www.fertilizerdaily.com/wp-content/uploads/2026/06/kanchipuram-tamil-naduindia-december-2-2012women-plant-rice-in-paddy-fields-at-kanchipuram-india-stockpack-istock-scaled.jpg) Rising urea and DAP import prices, driven by the Strait of Hormuz crisis, are increasing the gap between global fertilizer costs and India’s fixed farm-gate prices. This trend is adding pressure to government subsidy spending. India’s fertilizer subsidy program faces increasing fiscal pressure as import costs, affected by disruptions in the Strait of Hormuz, push procurement prices to multi-year highs. This highlights the strain on the country’s fixed-price fertilizer policy. According to Agro Spectrum India, the government recently secured a major urea import tender at landed prices of about $959 per metric ton on the east coast and $935 per metric ton on the west coast. A separate tender for diammonium phosphate (DAP) was concluded at $935 per metric ton for the east coast and $930 per metric ton for the west coast. Despite these higher procurement costs, DAP continues to be sold to farmers at approximately 1,350 rupees ($15.70) per 50-kilogram bag under India’s Nutrient-Based Subsidy (NBS) program. India consumes about 40 million metric tons of urea annually, making it one of the world’s largest fertilizer markets. The country imports approximately 25% to 26% of its urea needs and depends on overseas sources for about **85%** of the natural gas used in domestic urea production. This reliance leaves the sector highly exposed to global energy and fertilizer market fluctuations. The government has budgeted 1.71 trillion rupees (about $19.9 billion) for fertilizer subsidies in fiscal year 2026-27. However, analysts warn that actual spending may significantly exceed this amount as the gap between import costs and regulated retail prices widens. In response, officials have expanded fertilizer procurement from Russia, Morocco, and Canada using alternative shipping routes around the Cape of Good Hope and increased domestic urea production by an estimated 23% through emergency natural gas purchases. India began the Kharif planting season with urea inventories up 10.7% year over year and DAP stocks more than doubling. Maintaining these supply levels is expected to further increase the government’s subsidy burden. Source: [Agro Spectrum India](https://agrospectrumindia.com/2026/05/29/high-cost-urea-and-dap-imports-deepen-pressure-on-indias-fertiliser-subsidy-regime.html) Tags: [DAP](https://www.fertilizerdaily.com/tag/dap/), [fertilizer prices](https://www.fertilizerdaily.com/tag/fertilizer-prices/), [fertilizer subsidies](https://www.fertilizerdaily.com/tag/fertilizer-subsidies/), [food security](https://www.fertilizerdaily.com/tag/food-security/), [India](https://www.fertilizerdaily.com/tag/india/), [kharif](https://www.fertilizerdaily.com/tag/kharif/), [nitrogen](https://www.fertilizerdaily.com/tag/nitrogen/), [nitrogen fertilizer](https://www.fertilizerdaily.com/tag/nitrogen-fertilizer/), [nutrient-based subsidy](https://www.fertilizerdaily.com/tag/nutrient-based-subsidy/), [urea](https://www.fertilizerdaily.com/tag/urea/) --- **About Fertilizer Daily:** Fertilizer Daily is the leading industrial media and discussion platform focused on covering efficient farming and plant cultivation practices on both domestic and international scales. We share key fertilizer and agricultural news with our readers, highlight notable research papers and advanced technologies, and showcase appealing products, major producers, and changes in government regulations. Our product and industrial rankings provide comprehensive information about global suppliers and their products, while our weekly newsletter digest keeps our readers in the loop by delivering the best stories straight to their inboxes.