Ensuring affordability, soil health, and productivity in Indian agriculture

The Government of India’s approval of Nutrient-Based Subsidy (NBS) rates for the Rabi 2025–26 season marks a critical intervention at a moment of heightened input cost volatility and climate-linked production risk. Effective from October 1, 2025, to March 31, 2026, the revised subsidy framework covers phosphatic and potassic (P&K) fertilizers, including DAP and NPKS grades, reinforcing the government’s commitment to balanced fertilization, farm affordability, and long-term soil sustainability.

The tentative budgetary requirement for the Rabi 2025–26 season stands at approximately Rs 37,952 crore, around Rs 736 crore higher than the allocation for the Kharif 2025 season. This increase reflects both global price pressures and the government’s intent to shield Indian farmers from external shocks while ensuring uninterrupted fertilizer availability during the critical winter cropping cycle. Between 2022–23 and 2024–25 alone, more than Rs 2.04 lakh crore has been committed under the NBS framework, underscoring the scale and fiscal priority accorded to nutrient security in Indian agriculture.

From product subsidy to nutrient logic

Introduced in April 2010, the Nutrient-Based Subsidy scheme represented a structural shift in fertilizer policy, moving away from product-based subsidies toward nutrient-linked support. By anchoring subsidies to the nutrient content of fertilizers—nitrogen, phosphorus, potassium, and sulphur—the scheme sought to correct long-standing imbalances in fertilizer use, particularly the over-application of nitrogen at the expense of soil health and long-term productivity. Over time, NBS has evolved into a cornerstone of India’s strategy to align agronomic efficiency with fiscal rationality.

By encouraging farmers to choose fertilizers based on crop and soil needs rather than price distortions, the scheme has played a critical role in addressing nutrient mining and restoring soil fertility across diverse agro-climatic zones.

Revised nutrient subsidy rates for Rabi 2025–26

For the Rabi 2025–26 season, the approved per-kilogram subsidy rates are Rs 43.02 for nitrogen, Rs 47.96 for phosphorus, Rs 2.38 for potash, and Rs 2.87 for sulphur. These nutrient-linked rates translate into product-wise subsidies across 28 grades of P&K fertilizers, reflecting a steady expansion from the original 25 grades covered until Rabi 2023–24.

Since Kharif 2024, the inclusion of advanced and fortified grades—such as NPK 11:30:14 fortified with magnesium, zinc, boron, and sulphur, Urea–SSP complexes, and fortified Single Super Phosphate—signals a decisive policy pivot toward addressing micronutrient deficiencies and modernizing fertilizer portfolios in line with contemporary soil health challenges.

DAP subsidy enhancement and inclusion of ammonium sulphate

Among the most consequential decisions for Rabi 2025–26 is the sharp enhancement of the Di-Ammonium Phosphate (DAP) subsidy to Rs 29,805 per metric tonne, compared with Rs 21,911 per metric tonne in the previous Rabi season. This increase is aimed at stabilizing farmer access to phosphorus during a period of volatile international raw material prices.

Ammonium sulphate, both domestic and imported, has also been brought under the NBS ambit, expanding the range of sulphur-bearing fertilizers available to farmers. Fortified and coated fertilizers containing boron or zinc will continue to receive additional subsidies over and above base rates, reinforcing the government’s emphasis on nutrient completeness rather than volume-driven fertilizer consumption.

Decontrolled pricing with regulatory oversight

Operationally, the NBS scheme functions under a decontrolled regime for P&K fertilizers, allowing manufacturers and importers to fix Maximum Retail Prices while remaining subject to regulatory scrutiny. Fertilizer companies are required to submit audited cost data to the Department of Fertilizers to enable assessment of price reasonableness and ensure that subsidy benefits are effectively passed on to farmers.

Profit margins are regulated, with clearly defined thresholds for importers, manufacturers, and integrated producers. Any profit exceeding prescribed limits is treated as unreasonable and recoverable, maintaining discipline in a sector that operates at the intersection of public welfare and private enterprise.

Transparency, compliance, and digital monitoring

Transparency and compliance are reinforced through mandatory display of Maximum Retail Price and subsidy details on every fertilizer bag, with violations punishable under the Essential Commodities Act, 1955. The Integrated Fertilizer Management System (iFMS), a comprehensive web-based platform, enables real-time monitoring of fertilizer production, imports, movement, stock availability, and retail distribution.

Through monthly supply planning, continuous digital tracking, and weekly coordination meetings between central ministries and state agriculture departments, the system plays a critical role in preventing shortages, price distortions, and regional imbalances during peak demand periods.

Strengthening domestic manufacturing capacity

Beyond price stabilization, the NBS scheme has delivered measurable structural outcomes in domestic fertilizer manufacturing. Production of P&K fertilizers—particularly DAP and NPKS—has increased by over 50 percent, rising from 112.19 lakh metric tonnes in 2014 to 168.55 lakh metric tonnes by December 30, 2025.

This sustained growth reflects policy initiatives aimed at reducing import dependence, improving capacity utilization, and strengthening India’s indigenous fertilizer ecosystem, aligning closely with the Atmanirbhar Bharat agenda.

Productivity gains and soil health outcomes

Agronomically, the transition toward balanced nutrient application has translated into tangible productivity gains. Since the implementation of the NBS scheme, foodgrain yields have increased from 1,930 kilograms per hectare in 2010–11 to 2,578 kilograms per hectare in 2024–25, reflecting improvements in soil nutrient balance and crop response.

The emphasis on secondary and micronutrients has also helped address soil fatigue and multi-nutrient deficiencies that emerged from decades of skewed fertilizer use, supporting long-term sustainability alongside yield growth.

A cornerstone of India’s fertilizer policy

As India navigates the dual challenge of feeding a growing population while restoring degraded soils, the Nutrient-Based Subsidy scheme has emerged as a central pillar of fertilizer and soil health policy. The expansion to 28 fertilizer grades, inclusion of fortified products, enhanced digital oversight through iFMS, and sustained fiscal backing together position NBS as more than a subsidy mechanism—it is an enabling framework for resilient, efficient, and future-ready agriculture.

For Rabi 2025–26, the policy signal is unambiguous: balanced fertilization is no longer an agronomic aspiration alone, but a foundational element of India’s food security, farmer welfare, and sustainable growth strategy.