The revised nutrient-based subsidy (NBS) rates notified for the rabi season of FY2026 are expected to benefit NPK manufacturers, owing to the increased subsidies for phosphorus and sulphur. However, imports of Di-ammonium Phosphate (DAP) are likely to remain loss-making due to elevated international prices and insufficient NBS rates. Given that the subsidy outlay for P&K fertilisers in FY2026 is expected to be inadequate, ICRA anticipates that the Government of India will make additional allocations to cover the shortfall.

Exhibit: Trend in NBS rates

Source: DoF, ICRA Research