India's fertiliser subsidy may cross ₹3 lakh crore if crisis drags on
According to the Economic Times, India's fertiliser subsidy bill may cross ₹3 lakh crore (about ₹3 trillion) if the global supply crisis drags on. Rising energy and feedstock costs are inflating the bill. The government aims to keep prices low for farmers.
According to the Economic Times, India's fertiliser subsidy bill may cross ₹3 lakh crore if the global supply crisis drags on. Rising energy prices and feedstock costs are pushing up the import and production costs of urea and other fertilisers.
India covers the gap with a subsidy to supply farmers with fertiliser at low, fixed prices. As costs rise, the burden borne by the state grows, putting pressure on the public budget.
The Iran war's spillover into natural gas and energy prices directly affects the cost of inputs used to make fertiliser. This content is not investment advice; the final size of the subsidy bill will depend on the path of global prices and the government's policy choices.
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