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EXCLUSIVE India faces record fertiliser subsidy in 2021/22

Reference: Reuters

NEW DELHI, Nov 30 (Reuters) - India plans to increase 2021/22 fertiliser subsidies to a record of more than 1.55 trillion rupees ($20.64 billion) to avoid shortages amid a sharp increase in global prices of the chemicals, sources familiar with the matter said.

The figure is almost double the amount budgeted for fertiliser subsidies in the budget for this fiscal year ending on March 31.

India, the top importer of urea, is a major buyer of diammonium phosphate (DAP) needed to feed its huge agriculture sector which employs about 60% of the country's workforce and accounts for 15% of $2.7 trillion economy.

The government provides financial support to companies such as National Fertilizer Ltd (NAFT.NS), Madras Fertiliser Ltd (MDFT.NS), Rashtriya Chemical & Fertilisers Ltd (RSTC.NS), Chamabal Fertilsers & Chemicals Ltd (CHMB.NS) that sell fertilisers at below-market rates.

Global fertiliser prices have surged roughly 200% over the past year after record rises in the price of the two main energy sources - coal and natural gas - used to produce the crop nutrients and new export restrictions on fertilizers by China and Russia.

In this fiscal year, New Delhi has already raised fertiliser subsidies twice pushing up the 835.48-billion-rupee budgeted support by 434.30 billion rupees.

"This year is going to be one of the highest subsidy payout because prices in international markets have gone up due to various reasons including restriction by China on DAP exports," said one of the officials... Read More