Industry Calls for Predictable Subsidy Support, Balanced Nutrition, and Investment Enablement Amid Global Volatility
- FAI has outlined
budget priorities to ensure fertiliser security amid global input price
volatility and import dependence.
- The industry has
sought predictable subsidies, balanced nutrition reforms, and support for
domestic phosphatic capacity.
- Tax, GST, and
circular economy measures have been flagged to improve cost efficiency and
manufacturing viability.
New
Delhi : Ahead of the
Union Budget 2026–27, The Fertiliser Association of India (FAI) has
urged the Government to consider targeted policy and fiscal measures to
strengthen India’s fertiliser security, promote balanced nutrient use, and
support domestic manufacturing in line with the vision of Atmanirbhar Bharat.
FAI noted
that India’s record food grain production of 358 million tonnes in 2024–25
underscores the critical role of fertilisers in sustaining agricultural growth.
To maintain this momentum, the industry has emphasised the importance of
improving nutrient use efficiency, encouraging modern agricultural
technologies, and ensuring a stable and predictable policy environment amid
rising input costs and climate variability.
The industry
highlighted that sustained volatility in international prices of key fertiliser
inputs such as rock phosphate, phosphoric acid, ammonia, potash and sulphur,
driven by geopolitical tensions, supply chain disruptions and export
restrictions by major producing countries, has increased production costs and
import dependence. While timely government interventions, including supply
arrangements with Morocco, Saudi Arabia and Qatar, have helped
secure availability, continued uncertainty in global markets has impacted
investment sentiment.
Observing the
cumulative impact of these challenges, Dr.
Suresh Kumar Chaudhari, Director General, The Fertiliser Association of India,
noted that sustained fertiliser security depends on maintaining a balance
between affordability for farmers, financial viability for manufacturers, and
investment continuity. He said that predictable subsidy frameworks, rational
taxation, and timely policy interventions are essential to ensuring
uninterrupted nutrient availability while supporting efficient and sustainable
fertiliser use.
FAI has
underscored the need for sustained policy support to encourage fresh
investments in indigenous phosphatic and potassic fertiliser capacity,
backward integration projects, and strategic overseas sourcing, in line with Atmanirbhar
Bharat and Make in India objectives. The industry also highlighted
the importance of targeted incentives for acid and complex fertiliser plants
to improve efficiency, reduce emissions, and address challenges related to phospho-gypsum
disposal by promoting its use in construction, soil amendment,
and industrial applications.
On the
taxation front, the fertiliser industry has sought rationalisation of customs
duties and GST provisions affecting key raw materials. This
includes exemption or reduction of Basic Customs Duty on inputs such as ammonia,
phosphoric acid, sulphuric acid, rock phosphate and sulphur, relief from Agriculture
Infrastructure and Development Cess, and resolution of issues
arising from inverted
GST duty structures leading to accumulation of unutilised input
tax credit.
The industry
has also recommended direct tax measures, including restoration of
weighted deductions for R&D and farmer education, incentives for
downstream fertiliser projects, accelerated depreciation for energy-efficient
equipment, and easing of compliance and litigation burdens.
FAI further
emphasised the need to promote balanced fertilisation to protect soil health,
noting that disparities between urea and P&K fertiliser prices have led to
an imbalanced N:P:K
consumption ratio. Bringing urea under the nutrient-based
subsidy framework, alongside promotion of innovative fertiliser
products, bio-fertilisers, integrated nutrient management and initiatives such
as PM-PRANAM,
would help correct price distortions and support sustainable farming practices.
The
fertiliser industry expressed confidence that timely consideration of these
suggestions in the Union Budget 2026–27 would improve cost efficiency and
financial viability, strengthen domestic manufacturing, reduce vulnerability to
external supply shocks, and ensure uninterrupted availability of fertilisers to
Indian farmers, supporting long-term agricultural growth and national food
security.