What Happened
- A policy analysis argues that India's fertiliser strategy — currently dominated by heavy imports and large subsidies — needs a structural shift toward domestically driven bio-based and sustainable fertiliser innovation.
- The opportunity lies in leveraging India's scientific and agricultural capacity to become a global leader in biologically intelligent farming inputs, reducing dependence on imported fertiliser inputs that expose the country to global price and supply volatility.
- India's fertiliser subsidy burden for 2025-26 stands at approximately ₹1.68 lakh crore — one of the largest line items in the Union Budget — with urea imports spiking 137% in April–October 2025 compared to the same period the previous year.
- The argument frames India's fertiliser transition as an economic security issue as much as an environmental one.
What Happened (continued)
- Between April–October 2025, DAP imports rose 69% year-on-year, driven by soil depletion and a compressed Kharif season.
- Six new urea plants commissioned over the past six years added 76.2 lakh metric tonnes of production capacity, including a new facility in Namrup, Assam.
- India has a long-term supply agreement with Saudi Arabia for 3.1 million metric tonnes of DAP annually for five years starting 2025-26, reflecting import diversification efforts.
Static Topic Bridges
Fertiliser Subsidy Policy in India: Urea and NBS
India operates a two-track fertiliser subsidy system. Urea is under a statutory fixed Maximum Retail Price (MRP) regime: a 45 kg bag costs farmers ₹242 (unchanged since March 2018), irrespective of production or import costs. The difference between delivered cost and MRP is paid as subsidy to manufacturers and importers by the Central Government via the Department of Fertilizers (Ministry of Chemicals and Fertilizers). Phosphatic and Potassic (P&K) fertilisers — DAP, MOP, NPKS grades — operate under the Nutrient Based Subsidy (NBS) Scheme (launched April 2010), where a fixed subsidy per kg of nutrient (N, P, K, S) is paid to manufacturers.
- Urea MRP: ₹242 per 45 kg bag (fixed since March 2018).
- Total fertiliser subsidy budget 2025-26: approximately ₹1.68 lakh crore.
- Urea subsidy component: approximately ₹1.19 lakh crore; P&K (NBS): approximately ₹49,000 crore.
- NBS covers 28 grades of P&K fertilisers; rates are revised annually or biannually.
- For Kharif 2025, total NBS outlay was ₹37,216.15 crore.
- Special one-time subsidy of ₹3,500 per tonne was extended for DAP (April 2024–March 2025).
Connection to this news: The sheer scale of subsidy expenditure — and its continued growth despite new domestic capacity — underscores why the piece argues for structural reform rather than continued subsidy expansion.
India's Fertiliser Import Dependence and Supply Chains
India produces approximately 30–31 million tonnes of urea domestically but imports an additional 6–10 million tonnes annually. DAP and other P&K fertilisers are more severely import-dependent — India sources large volumes from Russia, China, Morocco, Saudi Arabia, and Jordan. This creates vulnerability to geopolitical disruptions, freight cost spikes, and currency depreciation. The Russia-Ukraine conflict (2022 onwards) and subsequent global supply disruptions exposed the fragility of India's fertiliser supply chains.
- Urea domestic production: ~30–31 million tonnes/year.
- Urea imports in April–October 2025: up 137% year-on-year.
- DAP imports in April–October 2025: up 69% year-on-year.
- Long-term DAP supply agreement with Saudi Arabia: 3.1 million metric tonnes/year for 5 years from 2025-26.
- Six new urea plants commissioned (2019–2025): added 76.2 lakh metric tonnes capacity.
- New urea plant at Namrup, Assam: capacity 1.27 million tonnes, aimed at reducing North-East freight costs.
Connection to this news: The import surge even after significant domestic capacity addition illustrates that demand growth is outpacing production — strengthening the case for demand-side innovation through more efficient bio-inputs.
Soil Health and the Over-Use of Chemical Fertilisers
India's Green Revolution-era nitrogen fertiliser use created a pattern of soil health degradation. Overuse of urea has caused soil acidification, micronutrient depletion, and declining marginal productivity — more inputs yielding smaller additional outputs over time. Soil health cards (under the Soil Health Card Scheme, 2015, Ministry of Agriculture) are intended to guide balanced fertiliser use, but uptake of recommendations remains low. The government's Paramparagat Krishi Vikas Yojana (PKVY) and PM Pranam (Promotion of Alternate Nutrients for Agriculture Management) scheme both incentivise states and farmers to reduce chemical fertiliser consumption.
- PM Pranam scheme (launched 2023): States that reduce fertiliser consumption below a baseline receive 50% of subsidy savings as a grant.
- Soil Health Card Scheme (2015): Over 23 crore cards issued; recommends balanced NPK based on soil testing.
- India's fertiliser use efficiency is low compared to global benchmarks — significant nutrient runoff causes water body eutrophication.
- Bio-stimulants and nano-fertilisers (nano-urea approved by IFFCO in 2021) represent domestically developed alternatives reducing subsidy burden.
Connection to this news: The article's call for "biologically intelligent agriculture" connects directly to these existing policy instruments — PM Pranam, nano-urea, and soil health-based application — which already incentivise reduced chemical fertiliser use.
Bio-Fertilisers and India's Innovation Potential
Bio-fertilisers are formulations of living microorganisms — nitrogen-fixing bacteria (Rhizobium, Azotobacter), phosphate solubilisers (Bacillus, Pseudomonas), and mycorrhizal fungi — that enhance soil nutrient availability naturally. The Department of Biotechnology and ICAR (Indian Council of Agricultural Research) have been developing bio-fertiliser strains adapted to Indian agro-climatic zones. The FCO (Fertiliser Control Order), 1985, now includes bio-fertilisers as a regulated category.
- IFFCO's nano-urea (liquid): First nano-fertiliser approved globally; can replace up to 50% of conventional urea per application.
- India's bio-fertiliser market is estimated to grow at 14% CAGR, but absolute market size remains small relative to chemical fertiliser volumes.
- Bio-stimulants and biologically-based alternatives face adoption barriers: farmer awareness, supply chain cold chain requirements, and regulatory uncertainty.
- National Biopesticides and Biofertilizers Network (NBBN) operates under ICAR to develop region-specific bio-input formulations.
Connection to this news: Domestic innovation in bio-fertilisers — nano-urea, bio-stimulants, microbial consortia — is precisely the pathway the article envisions for India to reduce its subsidy and import burden while improving soil health.
Key Facts & Data
- Total fertiliser subsidy 2025-26: ~₹1.68 lakh crore (Union Budget).
- Urea MRP: ₹242 per 45 kg bag (unchanged since March 2018).
- Urea domestic production: ~30–31 million tonnes/year.
- Urea import spike (Apr–Oct 2025): +137% year-on-year.
- DAP import spike (Apr–Oct 2025): +69% year-on-year.
- DAP supply agreement with Saudi Arabia: 3.1 million metric tonnes/year for 5 years from 2025-26.
- New urea capacity added (2019–2025): 76.2 lakh metric tonnes from 6 new plants.
- PM Pranam scheme: States receive 50% of fertiliser subsidy savings as grant.
- IFFCO nano-urea: First globally approved nano-fertiliser product (2021).