The global pandemic and international conflicts, such as Russia’s invasion of Ukraine, have presented India with a significant challenge – meeting its fertilizer requirements for kharif sowing. This article provides an in-depth analysis of the situation, including the country’s fertilizer consumption, government subsidies, and related initiatives.
Fertilizer Consumption in India
Over the past decade, India has consumed around 500 LMT of fertilizer per year. Given the high cost of non-urea (MoP, DAP, complex) varieties, many farmers opt to use more urea than necessary. The central government’s yearly fertiliser subsidy bill is estimated to be Rs 1.3 lakh crore in FY21, showing a 62% increase over the budgeted amount.
To manage urea consumption, the government has implemented measures such as introducing neem-coated urea to prevent illegal urea diversion and promoting organic and zero-budget farming. Between the years 2018-19 and 2020-21, India’s fertiliser imports rose by almost 8% from 18.84 million tonnes to 20.33 million tonnes. In FY21, over a fourth of the required urea was imported.
Why India Needs Large Quantities of Fertilisers
The ever-increasing agricultural output of the country is linked to its growing need for fertilisers. Even with imported supplies, there is a gap between requirements and availability due to unmet indigenous production targets.
About Fertilizer Subsidy in India
The Indian government offers subsidies to fertiliser producers to make this essential agriculture ingredient affordable for farmers. Farmers can purchase fertilisers at below-market rates because the government bears the difference between the cost of production or import and the actual amount paid by the farmers.
Impact of Pandemic on Fertiliser Supply
The global pandemic has impacted fertiliser production, import and transportation worldwide. Major exporter China reduced exports due to a dip in production, affecting countries like India that source 40–45% of their phosphatic imports from China. The demand has increased in Europe, America, Brazil and Southeast Asia, but supply has been constrained.
The Government’s Initiatives and Schemes
The Department of Fertilizers (DoF) has introduced various initiatives, such as making it mandatory for domestic producers to produce 100% urea as Neem Coated Urea (NCU). This measure promotes soil health and reduces non-agricultural diversion. The New Urea Policy (NUP) 2015 was designed to maximize indigenous urea production, promote energy efficiency, and rationalize the government’s subsidy burden.
Future Directions with Policies and Strategies
In 2012, the government announced the New Investment Policy (NIP) to facilitate fresh investment in the urea sector and promote India’s self-sufficiency. Further developments include the usage of space technology in the fertilizer sector, including a pilot study on “Resource Mapping of Rock Phosphate using Reflectance Spectroscopy and Earth Observations Data”.
Under the Nutrient Based Subsidy (NBS) Scheme implemented in April 2010, a fixed amount of subsidy is offered on each grade of subsidized Phosphatic & Potassic (P&K) fertilizers. This scheme aims to ensure balanced use of fertilizers, improve agricultural productivity, and support the growth of the indigenous fertilizers industry while reducing the subsidy burden.
The government’s efforts to handle the challenges posed by the pandemic and international conflicts have led to new policies and strategies. These initiatives aim to ensure that farmers have access to affordable fertilizers, thus supporting India’s agricultural sector and overall economic growth.
