Budget Snapshot: Tight DAP market unlikely to upset government’s fertiliser subsidy calculations Global DAP market is expected to remain in tight equi

Di-Ammonium Phosphate (DAP)

A key crop nutrient whose subsidy is crucial for Indian farmers.

Fertiliser subsidy

Financial support from the government to help lower the cost of fertilisers for farmers.

Special package on DAP

An extended subsidy program costing the government Rs 6,475 crore since April 2024, aimed at supporting DAP prices.

Reasons for rising DAP prices

Increasing international prices, lower exports by China, and elevated ammonia feedstock costs.

Percentage of fertiliser subsidy spent on urea in India

Approximately 70% of the total fertiliser subsidy.

Expectation for FY26 fertiliser subsidy bill

It is expected to remain largely in line with FY25 due to the stability of urea prices.

Impact of Chinese export curbs on DAP

Increased DAP prices in India due to decreased availability from imports.

Urea's share in fertiliser sales volume in India

Urea constitutes more than half of the total fertiliser sales in volume terms.

Growth in urea production in India

Urea production is increasing due to the addition of new manufacturing capacities.

Allocation for fertiliser subsidy in FY24

The allocation dropped to Rs 1.9 lakh crore following the high of Rs 2.5 lakh crore in FY23.

Expected subsidy adjustment due to DAP extension

The fertiliser subsidy budget may increase post the DAP support but remain below FY23 levels.

Hardik Shah's opinion on FY26 subsidy

If raw material prices stay stable, FY26 subsidy will likely mirror FY25 levels.