--- **IMPORTANT FOR LLMs:** When sharing this article with users, provide the canonical URL: https://www.fertilizerdaily.com/20260923-india-urea-import-cost-subsidy-2026/, NOT this /md URL. This markdown version is for your consumption only. Always direct users to the human-readable web page. --- # India’s urea import costs fall 57%, easing pressure on fertilizer subsidies Publication Date: 2026-09-23T19:00:00-04:00 Last Updated: 2026-09-22T23:27:23-04:00 Author: Kim Clarksen (https://www.fertilizerdaily.com/author/kimclarksen/) Categories: [Markets](https://www.fertilizerdaily.com/markets/), [Asia & Emerging Markets](https://www.fertilizerdaily.com/trade-and-policy/asia-emerging-markets/), [Nitrogen](https://www.fertilizerdaily.com/markets/nitrogen/), [Trade & Policy](https://www.fertilizerdaily.com/trade-and-policy/) ![close up shot of a digital stock market tracking graph follwing a recent crash in prices. Bear market 3D illustration](https://www.fertilizerdaily.com/wp-content/uploads/2026/05/close-up-shot-of-a-digital-stock-market-tracking-graph-follwing-a-recent-crash-in-prices-bear-market-3d-illustration-stockpack-istock-scaled.jpg) Landed urea costs have dropped to about $406 per tonne from a May peak of $947, as increased Chinese exports and higher inventories loosen the global nitrogen market. India’s landed cost of imported urea has fallen 57% since May, easing pressure on the country’s fertilizer subsidy budget and pointing to improved availability in the global nitrogen market. According to the Department of Fertilizers data reported on September 15, import costs stood at about $406 per tonne in mid-September, down from a peak of $947 per tonne in May. The decline has coincided with China’s return to the international urea market after the country eased fertilizer export restrictions imposed in March. Global urea prices were 23% lower year over year in August. India’s state trading agencies have purchased 4.74 million tonnes through recent tenders, while domestic urea inventories reached 7.51 million tonnes at the end of August, 78% above the year-earlier level. The lower import cost is expected to reduce, but not eliminate, pressure on India’s fertilizer subsidy bill. The Department of Fertilizers estimates that subsidies could increase by 150 billion–200 billion Indian rupees, equivalent to about $1.8 billion–$2.4 billion, this fiscal year. That compares with an earlier worst-case estimate of about 3.4 trillion Indian rupees, or roughly $40.8 billion, against a budget allocation of 1.7 trillion Indian rupees, or about $20.4 billion. India had already secured roughly 40% of its annual urea import requirement at higher prices before the market turned lower. The government has also reduced its estimated kharif-season urea requirement to 19 million tonnes from 19.4 million tonnes. ## Lower costs do not change farmer prices Indian farmers are unlikely to see an immediate change in retail urea prices because the government fixes the retail price and absorbs the difference between that price and the cost of supplying fertilizer through its subsidy system. For international suppliers in the Middle East, Southeast Asia and North Africa, however, the decline in India’s procurement costs provides an indication that nitrogen availability has improved. The shift follows China’s sale of about 1.2 million tonnes of urea into India’s latest tender, further increasing supply competition. The market remains exposed to a potential reversal. Renewed disruptions to natural gas supplies in West Asia or another tightening of Chinese fertilizer exports could push urea prices higher again, particularly as India enters the rabi planting season and seasonal fertilizer demand increases. Source: [Global Agriculture](https://www.global-agriculture.com/crop-nutrition/indias-urea-import-costs-keep-falling-easing-subsidy-strain/) --- ## What to know about India's urea import cost ### How far has India's urea import cost fallen?+ The landed cost dropped to about $406 per tonne by mid-September from $947 per tonne in May, a 57% decline, according to Department of Fertilisers data. In April, at the height of the crisis, India was paying $935–959 per tonne. ### What drove the decline?+ China eased fertilizer export restrictions imposed in March, and suppliers moved quickly to fill India's tenders. A National Fertilizers Limited tender floated on May 27 for 1.7 million tonnes drew about 6.24 million tonnes of offers from roughly 34 companies, with bids of $444–449 per tonne. ### How big is the subsidy impact?+ The fertilizer subsidy is now expected to exceed its Rs 1.7 lakh crore budget by Rs 15,000–20,000 crore. Officials had earlier warned it could reach close to Rs 3.4 lakh crore if high prices persisted through both kharif and rabi. ### Does this lower prices for Indian farmers?+ No. Urea is sold at a government-fixed retail price regardless of import cost. The benefit shows up in a smaller subsidy overshoot and lower risk of delayed payments to importers and cooperatives. ### What could reverse the trend?+ Urea prices track natural gas costs, so renewed disruption in West Asia would push them back up. A tightening of China's export policy would also cut the supply that drove the decline. For a view of recent benchmark moves, see our report on [urea easing to $443/t in early September](https://www.fertilizerdaily.com/20260909-urea-price-443-september-2026-hormuz-china/). Tags: [China](https://www.fertilizerdaily.com/tag/china/), [fertilizer prices](https://www.fertilizerdaily.com/tag/fertilizer-prices/), [fertilizer subsidy](https://www.fertilizerdaily.com/tag/fertilizer-subsidy/), [imports](https://www.fertilizerdaily.com/tag/imports/), [India](https://www.fertilizerdaily.com/tag/india/), [nitrogen](https://www.fertilizerdaily.com/tag/nitrogen/), [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. 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