Fertilizer Scarcity During Monsoon Surge

Impact of Fertiliser Sales

A favorable monsoon guarantees soil hydration, reservoir replenishment, and groundwater replenishment, promoting increased planting and correspondingly greater fertilizer application.

Fertilisers provide essential nutrients such as nitrogen (N), phosphorus (P), potassium (K), and sulphur (S), which are crucial for plant development.

India ranks as the world's second-largest consumer and third-largest producer of fertilizers.

Constraints on the Supply Side:

As demand increased, supply couldn't keep up.

Urea production in the country decreased from 102.1 lakh tonnes during April–July 2024 to 93.6 lakh tonnes in April–July 2025, whereas DAP production stayed unchanged at 13.7 lakh tonnes.

Imports have also decreased, primarily because of supply limitations from China, a key exporter of fertilizers to India.

Subsidy Structure & Pricing Trends of fertilizers

Urea Subsidy Program: Through this program, farmers receive urea at a legally established maximum retail price (MRP).

The MRP for a 45 kg bag of urea is ₹242 per bag (not including neem coating fees and applicable taxes), whereas the actual price is approximately ₹3,000 for a 45 kg bag.

Subsidy policy based on nutrients: It seeks to encourage balanced fertilizer usage by connecting subsidies to the nutrient value (nitrogen, phosphorus, potash, and sulfur) instead of the end product.

In this program, the government establishes a specific subsidy rate per kilogram for every nutrient in P&K fertilizers.

In the overall budget for FY2025–26, the urea subsidy is set at ₹1.19 lakh crore, and the NPK subsidy is projected at around ₹0.49 lakh crore, indicating the government's substantial financial commitment

Government Efforts in the Fertilizer Industry

In 2010, the Government launched the Nutrient Based Subsidy (NBS) program for potassic and phosphatic fertilizers.

In this program, a set subsidy is given for subsidized P and K Fertilizers, including di-ammonium phosphate, according to their nutrient composition.

The One Nation One Fertilizer initiative was launched to create consistency in branding and guarantee transparency within the Fertilizer industry.

PM PRANAM initiative: PM Program for Restoration, Awareness Rising, Nourishment, and Improvement of Mother – Earth (PMPRANAM)” was introduced to encourage States/Union Territories to champion alternative fertilizers and the balanced application of chemical fertilizers.

Path Forward

Enhanced Demand Prediction: Fertiliser distribution should align with crop acreage trends to avoid shortages during favorable monsoon years.