India Cuts Fertiliser Subsidy to ₹1.77 Lakh Crore, Strengthens Nutrient-Based Reforms

India’s fertiliser subsidy regime is undergoing a significant transition, with the government balancing fiscal prudence and farmer welfare through targeted reforms and improved delivery mechanisms. According to recent data presented in the Lok Sabha, the government spent ₹1,77,129.50 crore on fertiliser subsidies in 2024–25 , continuing its commitment to ensuring affordable agricultural inputs while gradually reducing expenditure from earlier peak levels.

This marks a steady decline from ₹1,95,420.51 crore in 2023–24 and ₹2,54,798.93 crore in 2022–23 , a year when subsidy requirements surged due to global disruptions. The earlier spike often perceived to be close to ₹3 lakh crore was largely driven by the Russia–Ukraine conflict , which caused sharp increases in global fertiliser and energy prices. The government had then absorbed the cost escalation to shield farmers from price shocks.

With global prices stabilising, subsidy requirements have moderated. However, the reduction does not indicate a withdrawal of support. Instead, it reflects strategic rationalisation , improved efficiency, and better targeting of subsidies.

A key pillar of this transformation is the Direct Benefit Transfer (DBT) system for fertilisers. Under this mechanism, subsidies are routed to fertiliser companies only after sales to farmers are authenticated through Aadhaar-enabled Point of Sale (PoS) devices . This has significantly enhanced transparency, reduced leakages, and ensured that subsidised fertilisers reach genuine beneficiaries. The system also allows farmers to track their purchase limits, with a cap of 50 bags per month and 300 bags per season , further discouraging hoarding and diversion.

Complementing DBT is the Nutrient Based Subsidy (NBS) scheme , which shifts the focus from product-based subsidies to nutrient-based support. By incentivising fertilisers containing Nitrogen, Phosphorus, Potassium, and Sulphur , along with micronutrients like Zinc and Boron, the government aims to address long-standing soil nutrient imbalances and promote sustainable farming practices.

Consumption trends reinforce this shift. While traditional fertilisers like DAP have seen fluctuations, there is a notable rise in the use of complex fertilisers such as NPKS , indicating a gradual move towards balanced nutrient application. This aligns with broader policy goals of improving soil health and reducing overdependence on specific fertilisers.

Another emerging dimension is the growing adoption of nano urea , an innovation designed to enhance nutrient efficiency while reducing input costs and environmental impact. State-wise data shows increasing uptake across regions, including Andhra Pradesh, Karnataka, and Uttar Pradesh, signalling a gradual but important shift towards next-generation fertilisers.

To safeguard the system, fertilisers continue to be regulated under the Essential Commodities Act, 1955 and the Fertilizer Control Order, 1985 , empowering states to act against black marketing and diversion.

Overall, India’s fertiliser policy is evolving from a high-subsidy, volume-driven approach to a more efficient, technology-driven and sustainability-oriented framework . By combining fiscal discipline with farmer-centric reforms, the government is attempting to create a system that is not only economically viable but also environmentally responsible in the long run.