Whalesbook
Pre-Budget Demands for Input Cost Relief
The Fertiliser Association of India (FAI) has formally submitted its pre-budgetary proposals for the upcoming Union Budget 2026-27, calling for a rationalization of customs duties on critical raw materials. The association specifically requested exemptions or reductions on duties for inputs such as ammonia, phosphoric acid, sulphuric acid, rock phosphate, and sulphur. Additionally, the FAI seeks relief from the Agriculture Infrastructure and Development Cess (AIDC) and resolution for issues stemming from inverted GST structures that lead to unutilized input tax credits.
Call for Subsidy and R&D Framework Reforms
Beyond direct taxation, the FAI is advocating for the restoration of weighted deductions for research and development (R&D) and farmer education initiatives. Incentives for downstream fertiliser projects and accelerated depreciation for energy-efficient equipment are also on the agenda. A significant proposal involves bringing urea under the existing nutrient-based subsidy (NBS) framework. The association argues this, along with promoting bio-fertilizers and integrated nutrient management, is crucial to correct price distortions and encourage balanced fertilization, which is currently skewed towards urea due to price disparities with P&K fertilisers.
Securing Fertiliser Security Amidst Global Headwinds
FAI Director General Suresh Kumar Chaudhari highlighted the challenges posed by sustained volatility in international prices of key inputs like rock phosphate, phosphoric acid, and sulphur. Geopolitical tensions, supply chain disruptions, and export restrictions by major producing nations have escalated production costs and increased India's import dependence. While government interventions have secured availability, continued global uncertainty impacts investment sentiment. Chaudhari stressed that predictable subsidy frameworks, rational taxation, and timely policy interventions are vital for uninterrupted nutrient availability and efficient fertiliser use, directly linking these to India's foodgrain production goals and climate variability resilience.