India's government spent more than Rs 1.14 lakh crore on fertiliser subsidies in the first half of the 2026-27 fiscal year, about 65% of the Rs 1.76 lakh crore budgeted, because of high global prices of finished fertilisers and of LNG, the main feedstock for urea, the Financial Express reports.

Of the total, Rs 87,316 crore went on imported and domestically produced urea and Rs 26,857 crore on DAP, muriate of potash and NPK fertilisers, sources told the paper. The budget estimate has been revised up to Rs 1.84 lakh crore, and trade sources expect full-year outgo to be Rs 15,000–20,000 crore above the Rs 2.17 lakh crore of 2025-26.

Urea's landed cost fell about 57% to $406 a tonne last month from a peak of $947 in May 2026, and the government has diversified imports to countries including Oman, Malaysia, Vietnam, Georgia, Nigeria, Russia, Finland, Egypt, Algeria, Turkey and the Netherlands. But the global DAP price rose 8.4% to $925 a tonne in August from $853 in April, and sulphur's landed cost has doubled this year to about $1,050 a tonne because of the Strait of Hormuz disruption.

Farmers are shielded from these swings: urea still sells at Rs 266.50 per 45 kg bag, unchanged since March 2018, against a global price above Rs 4,000 a bag, and DAP at Rs 1,350 per 50 kg bag.

India imports about 70% of its fertiliser needs and raw materials. The record subsidy bill of Rs 2.54 lakh crore came in 2022-23, when the Russia-Ukraine war disrupted shipping. The report is by Sandip Das.

Source: Financial Express Agriculture