In its first meeting of 2025, Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the extension of the One-Time Special Package for Di-Ammonium Phosphate (DAP) fertilizer. This decision ensures the availability of DAP at affordable prices for farmers across the country.
The extension is effective from January 1, 2025, and will continue until further notice. This package provides an additional subsidy of Rs 3,500 per metric ton (MT) beyond the Nutrient-Based Subsidy (NBS) scheme.
Di-Ammonium Phosphate (DAP) is a widely used chemical fertilizer essential for enhancing soil fertility and boosting crop yields. India relies heavily on imports to meet its DAP requirements, sourcing significant quantities from countries like China, Morocco, and Saudi Arabia. Rising raw material prices in international markets often result in increased costs. To mitigate this impact, the government provides subsidies to ensure fertilizers remain affordable for farmers, safeguarding agricultural productivity.
The move highlights government’s efforts to stabilize fertilizer prices amidst fluctuating global market conditions and geopolitical challenges. Farmers will have consistent access to subsidized DAP, enhancing agricultural productivity during Kharif and Rabi seasons. The NBS scheme, introduced on April 1, 2010, governs the pricing of 28 grades of phosphatic and potassic (P&K) fertilizers. However, the special package for DAP is an added measure to ensure cost-effective fertilizer availability.
This extension follows a prior decision by the Cabinet in July 2024, where a one-time special package for DAP was approved for the period from April 1, 2024, to December 31, 2024. The financial implication of that package was approximately Rs 2,625 crore.
The current extension aims to address farmers' needs by absorbing global price volatility and ensuring supply chain stability.
