On Fertiliser Centre And States Must Align Policy

Prime Minister Narendra Modi wants Indian farmers to cut consumption of chemical fertilisers by 25-50 per cent, in order to conserve precious foreign exchange as well as protect the long-term fertility of Indian soils. However, the governments in Uttar Pradesh, Madhya Pradesh and Maharashtra are doing the opposite. All three — many more may follow — have decreed that manufacturers and suppliers of subsidised fertilisers such as urea and di-ammonium phosphate (DAP) cannot sell nutrient products where no government subsidy or price controls are in place. In other words, fertiliser companies can sell only those products whose usage is being discouraged by the Modi government. They have been banned from selling any bio, nano, water-soluble and liquid speciality fertilisers or micronutrients and bio-stimulants.

The ban orders are not only an example of the Centre and states working at cross purposes, but also of ease of doing business going into reverse. Most of the non-subsidised nutrient products being marketed by the likes of Iffco, Coromandel International and Yara Fertilisers are applied in low doses for high-value crops such as grapes, apple and pomegranate. Moreover, they are notified under the Centre’s Fertiliser Control Order after field trials for bio-efficacy and toxicology conducted by the Indian Council of Agricultural Research. What incentive would companies have now to innovate and introduce such products that can deliver nutrients more efficiently either straight into the plant’s root zone via drip irrigation or onto leaves by foliar application? If the Modi government is serious about weaning away farmers from urea and DAP — whose applied nutrients are more prone to volatilisation, leaching or locking in soils than being available for uptake by crops — it should crack down on states that are sending contrary signals to the industry and farmers alike.

India has enough land, water and sunshine for growing crops. But that’s not the case with fertilisers, where it is overwhelmingly import-dependent. In 2025-26, the country’s imports of fertiliser inputs and products were valued at about $27.2 billion. The unresolved West Asia conflict and closure of the Strait of Hormuz could result in that bill even surpassing the 2022-23 high of $33.4 billion post Russia’s invasion of Ukraine. The current crisis is both a moment of reckoning and an opportunity to transform the existing product-specific fertiliser subsidy regime into an expanded PM-Kisan 2.0 direct income support programme. When fertiliser prices are market-determined, farmers will start using the right nutrients in the required quantities for their crops. And they will be enabled even more when guaranteed a minimum income per acre per crop.