Cabinet Approves Nutrient Based Subsidy for Kharif 2025

Introduction

On 28 March 2025, the Union Cabinet approved revised Nutrient Based Subsidy (NBS) rates for the Kharif 2025 season to ensure affordable and timely access to Phosphatic and Potassic (P&K) fertilizers. The decision reaffirms the government's commitment to supporting farmers and stabilizing input costs amid global price fluctuations. 

Key Cabinet Approvals

1. Subsidy Period: The approved rates apply from 01 April 2025 to 30 September 2025, covering the entire Kharif cropping season.
2. Budget Allocation: A total outlay of ₹37,216.15 crore has been sanctioned — ₹13,000 crore higher than the Rabi 2024-25 budget.
3. Subsidy Coverage: The NBS scheme covers 28 different grades of P&K fertilizers, ensuring their availability at subsidized prices. This includes fertilizers like Di-Ammonium Phosphate (DAP), Muriate of Potash) (MOP), SSP, and complex NPK grades
4. Freight Subsidy Extension: The freight subsidy on Single Super Phosphate (SSP) has been extended for the Kharif 2025 season to further reduce financial burdens on farmers.
5. Nutrient-Based Subsidy Rates for Kharif 2025:
   1. 1. Phosphorus (P): ₹43.60/kg
      2. Potassium (K): ₹2.38/kg
      3. Sulphur (S): ₹2.61/kg
6.  Nitrogen (N) is not covered under the NBS scheme for P&K fertilizers. The subsidy rate of ₹43.02/kg for nitrogen is applicable for urea, which is not part of the NBS scheme for P&K fertilizers
7. Department of Fertilizers (DoF) Role: The DoF is responsible for overseeing the implementation of fertilizer subsidy schemes, including the Nutrient Based Subsidy (NBS) and the Direct Benefit Transfer (DBT) system.

Objectives of the Kharif 2025 Subsidy

1. Implementation Mechanism: The subsidy will be provided directly to fertilizer manufacturers and importers based on approved rates (ensuring affordable prices)
2. Seasonal Support: Ensure timely access to essential nutrients ahead of the Kharif 2025 sowing season, which is highly fertilizer-intensive.
3. Price Stabilization: Protect farmers from fluctuations in global prices of key fertilizers like DAP, MOP, and SSP.
4. Supply Continuity: Maintain an uninterrupted supply chain through predictable subsidy flows to manufacturers and importers.
5. Soil Health Reinforcement: Provide a mix of NPKS-based fertilizers to encourage nutrient-balanced soil practices.
6. Farmer Welfare Emphasis: Demonstrate continued government commitment to input affordability, especially for small and marginal farmers.

Overview of the Nutrient Based Subsidy (NBS) Scheme

Introduction & Evolution

1. The Nutrient Based Subsidy (NBS) scheme was introduced in April 2010 to reform India's fertilizer subsidy system.
2. Previously, subsidies were based on per-bag pricing, which favoured nitrogen-rich urea and led to imbalanced fertilizer use.
3. This imbalance resulted in soil degradation and reduced crop yields across agricultural regions.
4.  The NBS aimed to decontrol prices of P&K fertilizers while subsidizing nutrients directly, operating under the Fertilizer (Control) Order, 1985, issued under the Essential Commodities Act, 1955.

Core Objectives of NBS

1. Promote Balanced Fertilization: Ensure a 4:2:1 nutrient ratio (N:P:K) for better soil health and crop productivity
2. Enhance Agricultural Productivity: Enable optimal nutrient application to raise crop yields
3. Rationalize Subsidy Burden: Link subsidy to nutrient content to ensure efficient government spending
4. Support Domestic Industry: Strengthen local manufacturers and importers via predictable subsidy flow

Key Features of the Scheme

• Coverage: Applicable to 28 grades of P&K fertilizers, including DAP, MOP, SSP, and complex NPKS.
• Nutrient-Based Rates: Subsidy is fixed per kg of P, K, S — revised annually based on international and domestic prices.
• Inclusion of Micronutrients: Extra support for fertilizers enriched with zinc, molybdenum, and other micronutrients.
• Disbursement: Manufacturers receive subsidy directly while pricing remains controlled at the farmer level.
• DBT Mechanism: Since 2018, subsidies are routed via the e-Urvarak portal under the Direct Benefit Transfer system.

Benefits & Impact

• Improved Crop Yields: Balanced fertilization has led to higher productivity and better soil quality
• Cost Savings: Subsidized fertilizers have reduced input costs, improving farmer profitability
• Environmental Gains: The scheme has encouraged sustainable nutrient usage, reducing environmental degradation
• Farmer Reach: By covering 28 fertilizer grades, the scheme benefits a wide spectrum of crops and regions.

CHALLENGES OF THE NBS SCHEME

1. Overuse of Urea
   Urea is not part of NBS, so it remains cheaper and is overused by farmers (35.7 million tonnes used in FY23, causing nutrient imbalance).
2. Unbalanced Fertilizer Use
   Farmers apply more nitrogen but less phosphorus and potassium, harming soil health (actual NPK use often deviates from the 4:2:1 ideal ratio).
3. High Subsidy Burden
   Fertilizer subsidies are a major expense for the government (₹1.88 lakh crore in FY24, nearly 4% of the Union Budget).
4. Environmental Damage
   Excess chemical fertilizer use causes pollution and increases greenhouse gas emissions (especially from nitrogen-based fertilizers).
5. Diversion of Subsidized Urea
   A large portion of subsidized urea is misused or smuggled (20–25% diversion for non-agricultural use).
6. Regional Disparities & Low Awareness
   Different regions need different nutrients, but the scheme doesn't fully account for this. Many farmers lack knowledge on balanced fertilization (limited region-specific soil data).
7. Global Price Volatility
   Fertilizer imports make India vulnerable to international price shocks (especially DAP, MOP, and sulphur), affecting subsidy planning and farmer affordability.

 WAY FORWARD

1. Include Urea in the NBS Scheme
   Bring urea under the same subsidy system to reduce overuse and promote nutrient balance (urea use reached 35.7 million tonnes in FY23; ideal NPK ratio is 4:2:1).
2. Apply One Policy for All Nutrients
   Give equal support to nitrogen, phosphorus, and potassium to stop uneven use (China follows a uniform subsidy model across nutrients).
3. Promote Nano Fertilizers
   Support nano urea and nano DAP for better efficiency and lower environmental damage (25% higher efficiency than regular fertilizers).
4. Test Flat Per-Acre Subsidies
   Provide fixed subsidy per acre so farmers can buy fertilizers as per their soil needs (U.S. states use this system to reduce waste).
5. Use Technology to Track Fertilizers
   Strengthen tools like e-Urvarak, PoS machines, and Aadhaar linking to stop black marketing (20–25% urea diversion reported).
6. Spread Awareness Among Farmers
   Train farmers about balanced fertilization using Soil Health Cards and local centres (ICAR studies show up to 20% higher yields with proper nutrient use).

Conclusion

The Cabinet’s approval of NBS rates for Kharif 2025 highlights the government's push towards affordable farm inputs, balanced nutrient use, and reduced import dependency. This aligns with the broader goals of Doubling Farmers' Income, advancing Aatmanirbhar Bharat in agriculture, and securing nutrient and food sustainability for India’s future.

Appendix A:  NUTRIENTS – ROLE, AVAILABILITY, AND IMPORTS 1.  Role of Primary Nutrients (NPK) Nitrogen (N) – Supports leaf and stem growth, chlorophyll formation, and protein synthesis. (Essential for vegetative stages of crops like rice, wheat, and maize) Phosphorus (P) – Aids in root development, energy transfer, and flowering. (Important for seed setting and maturity; linked to ATP production) Potassium (K) – Enhances stress tolerance, water regulation, and nutrient transport. (Boosts resistance to drought and diseases) 2. Role of Secondary & Micronutrients Calcium (Ca) – Builds cell wall strength and promotes root expansion. (Prevents disorders like tip burn and blossom-end rot) Magnesium (Mg) – Key to chlorophyll synthesis and enzyme activation. (Drives photosynthesis and crop metabolism) Sulphur (S) – Enables protein formation and nitrogen fixation. (Crucial for oilseeds, legumes, and quality enhancement) Zinc (Zn), Boron (B), Iron (Fe), Manganese (Mn) – Support enzyme function, flowering, and sugar transport. (Deficiencies cause stunted growth, low yields, and poor crop nutrition) 3. Availability and Soil Deficiencies in India NPK Imbalance – India's usage ratio is 7.7:3.1:1, far from the ideal 4:2:1, leading to long-term soil degradation. Soil Test Deficiencies – Nitrogen: 97% Phosphorus: 83% Potassium: 71% Boron: 47%, Zinc: 39%, Iron: 37%, Sulphur: 36% Global Context – Around 40% of the world’s agricultural land suffers from nutrient imbalances, impacting food security and sustainability.  4. Fertilizer Imports and Dependency (2024 Data) Import Volume (Apr–Dec 2024) – India imported 23.54 million metric tonnes (MMT) of fertilizers, down from 25.56 MMT in 2023. Import Value – Total fertilizer import value fell by 23.2%, to US$2.43 billion, due to softened global prices. Top Sources – Urea: 1.86 MMT from China, valued at $0.73 billion DAP: 8.47 lakh tonnes from China (19.17% of total DAP imports) Other imports from Russia, Saudi Arabia, Jordan, Belarus Leading Port – Paradip – Handled 5.13 MMT, the highest fertilizer volume among Indian ports (Apr–Dec 2024).
	Appendix B: HOW THE APPROVAL PROCESS WORKS Proposal Preparation The Department of Fertilizers (DoF) under the Ministry of Chemicals & Fertilizers prepares the subsidy proposal, including NBS rates, based on market trends and nutrient needs. Internal Review & Consultation The proposal is reviewed internally and discussed with stakeholders such as fertilizer manufacturers, state governments, and sometimes input from ICAR or agronomic experts. Cabinet-Level Approval The final proposal is submitted to the Cabinet Committee on Economic Affairs (CCEA) for approval. (CCEA is responsible for major economic decisions, including pricing and subsidy policies.) Notification of Rates Once approved, the NBS rates (per kg of  P, K, S) are officially notified through the Department of Fertilizers. These are made public via PIB releases and the e-Urvarak portal. Subsidy Disbursement Subsidy is paid directly to fertilizer manufacturers/importers under the Direct Benefit Transfer (DBT) system. Farmers receive fertilizers at a fixed Maximum Retail Price (MRP). Role of CACP (Clarification) The Commission for Agricultural Costs and Prices (CACP) does not play a role in fertilizer pricing; it is responsible for Minimum Support Prices (MSP) for crops only.
Appendix C: AGRICULTURAL SEASONS – KHARIF VS RABI Kharif Season: Starts with the onset of the southwest monsoon (June) and ends around September/October. Major crops: Rice, maize, cotton, soybean, and pulses Fertilizer demand: High, due to monsoon-driven sowing and nutrient-depleted soils Rabi Season: Begins in October/November and continues till March/April. Major crops: Wheat, mustard, barley, chickpeas Fertilizer demand: Lower than Kharif, but still significant for nitrogen and phosphorus Zaid Season (Short): Between Rabi harvest and Kharif sowing (April–June) Includes short-duration crops like watermelon, cucumber, fodder These crops are often referred to as "filler" crops between Rabi and Kharif Why Subsidies Are Season-Specific: Prices and international trends change every few months Government reviews rates before each Kharif and Rabi season to ensure affordability and supply

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