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Rising Global Prices Fuel Subsidy Hike
The jump in global fertilizer prices, with urea costs nearly doubling since tensions in West Asia intensified, is directly causing the projected increase in India's subsidy spending. The government approved extra support for the April-June quarter to cover this potential Rs 10,000-15,000 crore monthly gap. This crucial step protects farmers from global price swings, a vital move ahead of the key sowing season.
Securing Fertilizer Supplies
To ensure enough fertilizer is available amid this uncertainty, India has increased both domestic production and imports. Nearly 97 lakh metric tonnes of fertilizer have recently been added to the system. Domestic output provided 76.78 LMT, while imports contributed 19.94 LMT. Stock levels for urea, DAP, NPK, and MOP are higher than last year, offering a vital buffer. Total stocks have now reached 199.65 lakh tonnes, ensuring availability.
Government Finances and Farm Support
While the Union Budget for 2026-27 initially set aside Rs 1.71 lakh crore for fertilizer subsidies, the ongoing geopolitical situation makes a final estimate for the full fiscal year uncertain. Prime Minister Modi's call to use less fertilizer is being met alongside the government's commitment to cover full seasonal demand and prevent shortages. This balances the need for careful government spending with stable agricultural production.