Why in the news
A new ICRIER policy paper, “De-risking Fertiliser Supplies for India Amid Rising Geopolitical Risks”, says the current West Asia turmoil is a chance to fix fertiliser policy.
Key facts
- Think tank: ICRIER (Indian Council for Research on International Economic Relations).
- Concern: heavy import dependence and the fiscal burden of subsidies.
- Import-linked share of the value chain: 68.6%.
- Estimated leakage under the present system: about 20%.
Value chain split
| Component | Share |
|---|
| Imported feedstock (mainly natural gas, raw materials) | 44.5% |
| Imported finished fertilisers | 24.1% |
| Domestic processing and manufacturing | 25.6% |
| Domestic feedstock | 5.8% |
Reform suggestions
| Proposal | Idea and benefit |
|---|
| DBT to farmers | Pay subsidy to farmers, not on the product; cuts leakages, encourages balanced use, raises fiscal efficiency |
| Gradual price deregulation | Starting with macronutrients; market-based pricing, efficient use, lower subsidy burden |
| Urea under NBS | Urea is now heavily subsidised and price-controlled; the move would curb excess nitrogen use and help soil health |
| AgriStack targeting | If direct reform is hard at first, limit sales by farm size, crop type and State Agricultural Universities (SAU) nutrient advice |
Supply-side steps
- Diversify import sources of fertiliser.
- Encourage overseas investment in fertiliser assets.
- Speed up domestic exploration of feedstock.
- Simplify regulatory frameworks.
Exam angle
- Report: De-risking Fertiliser Supplies for India Amid Rising Geopolitical Risks by ICRIER.
- Scheme for urea inclusion: Nutrient Based Subsidy (NBS).
- Digital platform for targeting: AgriStack.