Cabinet Approves Rs 62,370 Crore Fertilizer Subsidy for Rabi Season
The Union Cabinet has sanctioned a Rs 62,370 crore subsidy allocation for phosphatic and potassic fertilisers for the 2026-27 rabi cropping season. Chaired by Prime Minister Narendra Modi on Wednesday, November 11, 2026, the executive meeting accepted the Department of Fertilisers' proposal fixing Nutrient Based Subsidy rates covering October 2026 through March 31, 2027. Union Minister for Information and Broadcasting Ashwini Vaishnaw briefed reporters after the session, stating that the financial package shields Indian cultivators from elevated international input prices. The newly cleared budget represents a substantial 64.3% expansion, or an increase of Rs 24,418 crore, over the Rs 37,952 crore earmarked for the preceding rabi period.
Geopolitical Disruptions and Nutrient Pricing Mechanism
International fertilizer supply chains experienced pronounced instability driven by conflict in West Asia and maritime shipping constraints through the Strait of Hormuz. World Trade Organization records show India procured almost two-thirds of its nitrogenous fertiliser supplies from the Gulf region based on 2024 trade statistics. Global market data indicates world urea prices climbed from approximately $400 per tonne to over $850 per tonne before moderating toward $453 per tonne in June. Concurrently, international di-ammonium phosphate rates increased from roughly $580 to $770 per tonne, while sulphur supply shortages constrained global phosphate chemical processing. Minister Vaishnaw stated that retail prices for di-ammonium phosphate will remain unchanged at Rs 1,350 per bag of 50 kg each.
Coverage Across Crop Formulations and Historical Rates
The nutrient-based support system covers 28 grades of phosphatic and potassic fertilisers, including compound NPKS formulations essential for winter staple crops. Operational since April 2010, the policy calculates fiscal compensation based on the elemental nutrient proportions present within each designated fertilizer product. For the prior rabi cycle, baseline per-kilogram nutrient rates stood at Rs 43.02 for nitrogen, Rs 47.96 for phosphate, Rs 2.38 for potash, and Rs 2.87 for sulphur. Earlier in the agricultural year, the central government allocated approximately Rs 41,534 crore towards subsidizing soil nutrients for the kharif 2026 season. The fiscal disbursements are distributed directly to registered manufacturing units and licensed importers to sustain affordable retail prices for agricultural producers. Under the Nutrient Based Subsidy framework, the government fixed the subsidy at Rs 94.21 per kg for nitrogen, according to BW Businessworld.
Companion Cabinet Authorizations and Credit Mechanisms
In a concurrent economic decision, central ministers cleared a Rs 5,000-crore credit backing pool to support micro-business borrowers under the MUDRA initiative. Originally introduced in April 2015, the micro-lending scheme provides institutional credit facilities to microenterprises through commercial banks and non-banking financial entities. The administration also cleared a capital expenditure of Rs 3,230 crore to redevelop the North and South Block secretariats into the Yuge Yugeen Bharat Museum.