Soaring fertilizer bills are pushing India to reshape a decades-old subsidy system that helped transform a vulnerable food importer into one of the world’s agricultural heavyweights.
The country’s farmers use more urea – a nitrogen-heavy crop nutrient – than the US and Brazil combined, buoyed by government support that keeps prices well below market rates. As the war in Iran upended global fertilizer and energy flows, the cost to procure it more than doubled and the cargoes of gas needed to produce its own grew more scarce. That has swelled an already hefty subsidy bill and added to a surge in foreign-exchange outflows that’s put the rupee among Asia’s worst-performing currencies this year.
