The Indian fertiliser industry is actively lobbying for crucial policy changes ahead of the Budget 2026-27. The Fertiliser Association of India (FAI) is at the forefront, pushing for reductions in import duties and reforms in subsidy structures. These measures are seen as vital for cost reduction and enhanced profitability within the sector.
The primary demand from the FAI is the exemption or reduction of basic customs duty on key inputs. These include essential materials like ammonia, phosphoric acid, sulphuric acid, rock phosphate, and sulphur. The industry argues that these duty cuts will significantly lower production costs, thereby improving the financial health of fertiliser manufacturers.
The push for subsidy reforms comes as the government continues to manage the complex landscape of fertiliser subsidies. The FAI likely seeks a more streamlined and efficient subsidy mechanism to ensure timely payments and reduce the financial burden on manufacturers. These reforms could involve adjustments to subsidy rates, changes in distribution models, or other measures designed to improve the overall effectiveness of government support.
The industry’s focus on these areas reflects broader challenges in the fertiliser market. Fluctuating global prices for raw materials, coupled with the need to maintain affordable prices for farmers, put constant pressure on manufacturers. Duty reductions and subsidy reforms are seen as key levers to address these challenges and ensure the long-term sustainability of the fertiliser sector.
The upcoming Budget will be critical in determining the future trajectory of the fertiliser industry. The government’s response to the FAI’s demands will shape the industry’s ability to manage costs, maintain production levels, and support the agricultural sector.
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