New Delhi, Jan. 7 -- India's fertilizer imports are expected to go up from 10 million tonnes this year to 12 million in the next. This has led to heavy lobbying for incentives to raise domestic production for import substitution. On the face of it, this demand has merit. But look closer, and the picture changes drastically.

India needs to reform its policy for fertilizers. The subsidy bill on these farming inputs was above Rs.1.9 trillion in 2024-25, and while this fiscal year's budget allotted under Rs.1.6 trillion, the actual expense could go higher. This figure does not reflect the subsidy on natural gas used as an input by our fertilizer industry, which pays only about half the regular price (of up to $13 per million British thermal ...