India Increases Fertilizer Subsidies to Counter Global Market Volatility

Kathmandu. Due to the sharp rise in fertilizer prices in the international market caused by the war in West Asia, India has significantly increased subsidies on fertilizers to protect its agricultural sector. This government move is being viewed as an effort to ensure food security and provide relief to a large agricultural population.

The government stated that it has increased fertilizer subsidies by approximately 11 percent compared to last year. In India, the agricultural sector provides livelihoods to more than 45 percent of the total population, making it highly influential both economically and politically.

A statement issued by the Cabinet mentioned that fertilizer companies will be provided subsidies according to approved rates, ensuring that farmers receive fertilizers at affordable prices. The government stated that it has approved Nutrient Based Subsidy (NBS) rates, keeping in mind the fluctuations in the prices of raw materials like fertilizer and urea in the international market.

According to this decision, a plan worth approximately 415 billion rupees (4.48 billion US dollars) will be implemented for the upcoming summer crops. The plan will remain in effect for six months. It is expected to provide relief to farmers at a time when production costs are rising.

Internationally, the impact of the war has been even more widespread. The World Trade Organization recently warned that disruptions in fertilizer supply due to the Middle East conflict have posed a dual threat to global food security.

In particular, the restrictions imposed by Iran in the Strait of Hormuz have created obstacles for the transportation of oil, gas, and fertilizers. Under normal circumstances, about one-third of the world's fertilizer is transported through this route. Experts have been warning that such disruptions could have serious long-term consequences for food production.

As the impact of international conflict begins to directly affect the agricultural sector, India appears to have adopted a strategy of maintaining internal production and supply balance through the expansion of subsidies.