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DAP special subsidy
What it is
A one-time special package on di-ammonium phosphate, paid over and above the NBS rate, to hold the retail price at Rs 1,350 per 50 kg bag while landed import cost runs far higher
First announced at Rs 3,500 per tonne for Apr-Dec 2024, then extended from 1 Jan 2025 'till further orders' - an open-ended commitment rather than a fixed-term one
Impact on industries
- Keeps DAP available and affordable through import-price spikes, protecting sowing decisions in a nutrient India cannot supply domestically at scale
- Recreates the urea distortion in a decontrolled product - retail is held over 50% below landed cost, so an NBS-priced fertiliser is now administratively priced
- Open-ended and discretionary, so manufacturers cannot plan against it; whether it gets subsumed into NBS rates or continues separately is decided annually
- Coverage is uneven across the basket - other complex fertilisers get no equivalent package, distorting relative prices between them and DAP