Fertiliser subsidies in India are increasingly hostage to global commodity prices. Examine the fiscal and strategic implications, with reference to recent NBS revisions.

The Nutrient-Based Subsidy (NBS) scheme has run since April 2010. Under it, the Centre fixes a per-kg subsidy on N, P, K and S, and revises it each season in line with international prices of fertilisers and inputs [1]. The Rabi 2026-27 outlay of ₹62,370.02 crore is over 64% higher than in Rabi 2025-26 [1]. It shows that world markets, more than domestic policy, now set India's subsidy bill.

Fiscal implications

• Open-ended liability: rates follow world prices, so the bill rises even if farmers use no more fertiliser. More than ₹2.79 lakh crore was paid between 2022-23 and 2025-26 [1].
• Price control returning: DAP is fixed at ₹1,350/bag, and this cover now extends to TSP and imported MAP [1]. The exchequer absorbs every global price shock, which reverses the 2010 reform that let companies set the MRP [2].
• Weak cost discipline: the CAG found unreasonable loading of costs onto MRPs [2]. With prices capped, importers have less reason to bargain hard.
• Leakage: the subsidy is paid to companies, but forced bundling at shops erodes what farmers gain. A Parliamentary Standing Committee examined the problem in 2026 [3].

Strategic implications

• Import dependence: in 2023-24, 177 LMT of ~601 LMT of fertiliser consumed was imported, and only ~40% of DAP is made in India [4]. The most import-dependent product is the one whose price the State now guarantees.
• Food-security exposure: Rabi sowing relies on imported inputs. Stocks of 235.21 lakh tonnes (10 Nov 2026) give a cushion but do not remove the exposure [1].
• Nutrient imbalance: urea stays outside NBS, and K gets only ₹2.38/kg against ₹94.21 for N [1]. This tilts use towards nitrogen, which degrades soils and adds to future import needs.
• Self-reliance steps: the Sulphur package (20% of procurement cost, domestic producers only), freight subsidy on SSP and promotion of Ammonium Sulphate [1] help, but they are narrow.

Global prices therefore shape both India's fiscal space and its farm-input security. Several steps would restore NBS's original aim of market-linked, balanced fertilisation:

• extend the domestic-only support model to phosphatic intermediates;
• publish a cost formula for a "reasonable MRP";
• bring urea into nutrient-based pricing;
• curb demand through Soil Health Cards and PM-PRANAM.

Together these would advance Aatmanirbhar Bharat and SDG 2 (Zero Hunger).