The Union Budget 2026–27 delivers a calibrated response to the evolving demands of Indian agriculture, striking a deliberate balance between productivity enhancement, farmer affordability, and long-term industrial resilience.

At a time when global supply chains remain volatile and input costs continue to shape farm economics, the Budget’s approach underscores the government’s intent to stabilise the agricultural backbone while preparing it for a more data-driven, diversified future.

At the heart of the Budget lies a shift from aggregate targets to district-level agricultural outcomes, complemented by a renewed focus on better seeds, diversified cropping systems, and multilingual digital advisory platforms. Together, these measures aim to sharpen on-farm decision-making, improve resource efficiency, and reduce yield volatility—provided implementation remains tightly aligned with field-level realities.

Commenting on the Budget, S. Sankarasubramanian, Chairman, The Fertiliser Association of India and Managing Director & CEO, Coromandel International Ltd, said:

“This Budget brings together productivity, resilience, and affordability in a way that reflects the evolving needs of Indian agriculture. The focus on district-level outcomes, better seeds, diversified cropping, and multilingual digital advisory platforms has the potential to meaningfully improve on-farm decision-making and input efficiency, provided execution remains closely aligned with ground realities.”

A defining feature of the Union Budget 2026–27 is its clear reaffirmation of commitment to fertiliser supply security, recognising fertilisers not merely as farm inputs but as strategic enablers of food security. The allocation structure reflects a dual-pronged strategy—strengthening domestic manufacturing capacity while ensuring uninterrupted access to affordable nutrients for farmers.

The Budget provides Rs 91,000 crore for indigenous urea and Rs 34,000 crore for domestically produced phosphatic and potassic (P&K) fertilisers, reinforcing India’s long-term objective of self-reliance in critical agri-inputs. At the same time, continued support for imports—Rs 32,000 crore for urea and Rs 20,000 crore for P&K fertilisers—acknowledges present realities and safeguards against supply disruptions during periods of global uncertainty.

As Sankarasubramanian noted:

“The fertiliser allocations underline a steady commitment to domestic capability. Support of Rs 91,000 crore for indigenous urea and Rs 34,000 crore for domestically produced P&K fertilisers, alongside imported fertiliser support of Rs 32,000 crore for urea and Rs 20,000 crore for P&K, reinforces supply security while maintaining farmer access to affordable nutrients.”

Beyond headline allocations, the Budget addresses long-standing structural issues affecting the fertiliser sector’s financial health and operational efficiency. The emphasis on customs duty rationalisation and resolving inverted GST structures is particularly significant. These measures are expected to ease working capital pressures, improve cash flow predictability, and reduce cost distortions that have historically constrained investment and innovation within the sector.

“The emphasis on customs duty rationalisation and addressing inverted GST structures is particularly important, as it helps streamline costs, improve cash flows, and create a more predictable operating environment,” Sankarasubramanian added.

Crucially, the Budget’s design reflects a deeper alignment between agricultural policy objectives and industrial sustainability. By stabilising input availability and pricing while encouraging efficiency, localisation, and financial discipline, the government is laying the groundwork for a fertiliser ecosystem that can support farmers today without compromising future resilience.

“Overall, the approach strengthens alignment between agricultural priorities and industrial sustainability, supporting farmers today while building a more resilient and efficient fertiliser ecosystem for the future,” he said.

Taken together, the Union Budget 2026–27 signals continuity with reform, pragmatism over populism, and a nuanced understanding of agriculture as both a livelihood system and an industrial value chain. For the fertiliser sector, it provides not just fiscal support, but strategic clarity—anchoring affordability for farmers while enabling the sector to evolve into a more efficient, resilient, and future-ready pillar of India’s food security framework.

— Suchetana Choudhury (suchetana.choudhuri@agrospectrumindia.com)