The Indian government is planning a new pilot project to link the amount of subsidised fertiliser farmers receive to the size of their land holdings. This move aims to control rising government spending on fertiliser subsidies and prevent the misuse of these cheaper fertilisers.
JP Nadda, the Union Minister for Chemicals and Fertilisers, announced this plan in Parliament. He explained that the government wants to ensure farmers receive fertilisers according to what they can actually use on their land. Currently, some farmers may claim more subsidised fertiliser than they need, potentially selling the excess in the open market. “We are providing subsidised fertiliser to farmers. He (farmer) has the capacity to use 10 bags, but he is taking 50 bags. This has to be taken into consideration,” Mr Nadda stated.
This initiative comes as the government is looking for ways to encourage the balanced use of fertilisers. The current imbalanced use of fertilisers is harming soil health and increasing the government’s subsidy costs. Every year, the government supplies about 60 million tonnes of subsidised fertilisers to farmers. Around 18% of this supply comes from imports.
In the financial year 2024-25, the government’s spending on urea subsidies alone was a significant Rs 1.91 lakh crore. To address this, the government has also launched the PM Programme for Restoration, Awareness Generation, Nourishment and Amelioration of Mother-Earth (PM-PRANAM). This programme encourages states to reduce the overuse of chemical fertilisers and adopt integrated nutrient management practices. These practices help maintain soil fertility and ensure crops get the right amount of nutrients for better yields in a sustainable way.
So far, PM-PRANAM has shown some success. In August, the fertiliser ministry reported that fourteen states had reduced their combined fertiliser consumption by 1.51 million tonnes in 2023-24 compared to the average of the previous three years. This reduction is seen as a step towards cutting subsidies and rewarding states for promoting balanced fertiliser use.
Meanwhile, India’s fertiliser imports are expected to rise sharply. The Fertilizer Association of India (FAI) predicts a jump of over 41% to 22.3 million tonnes in the financial year 2025-26. This increase is due to higher domestic demand, partly driven by good monsoon rains. In the period from April to October 2025-26, India imported 14.45 million tonnes of fertilisers, which is nearly 69% more than the 8.56 million tonnes imported during the same period a year earlier.
“There has been an increase in imports of fertilisers because of a sudden spurt in domestic demand because of good rains,” said S Shankarsubramanian, Chairman of FAI. He also noted that current fertiliser stocks are adequate, with about 10.2 million tonnes available, including urea, DAP, and NPK fertilisers. India has secured large import volumes in recent months, ensuring there are no supply issues.