India’s DOF proposes additional phosphate subsidies

Spanish Market: Fertilizers
10/04/25

India's Department of Fertilizers (DOF) has proposed additional subsidies on DAP and imported TSP for the April-September Kharif season, according to a document seen by Argus.

The proposed compensations are on top of the current nutrient-based subsidy (NBS) and the 3,500 rupees/t special additional subsidy (other costs) on DAP that are already in place. If approved, they would balance DAP importers' losses at current rates.

The DOF has proposed returning to DAP importers and producers 4pc of the maximum retail price (MRP), plus a rebate on the goods and services tax (GST) on the MRP.

The DOF also has suggested paying importers the difference between the cfr prices for cargoes imported during this Kharif season and the average cfr price for DAP imports over the October 2024-March 2025 Rabi season.

At current exchange rates, this would add $81-82/t to the subsidy on DAP imported in the mid-$670s/t cfr, broadly equal to the losses currently faced by importers.

Importers buying DAP in the mid-$670s/t cfr are facing losses of about $84/t, given the US dollar/rupee exchange rate, the MRP of Rs27,000/t, the NBS of Rs27,799/t and the special additional subsidy of Rs3,500/t.

The 4pc return on the MRP, plus GST, will fall slightly short of covering the $33/t losses incurred by DAP producers importing phosphoric acid at $1,153/t P2O5 cfr and ammonia at $350/t cfr.

Producers making DAP with 30-31pc P2O5 phosphate rock imported at $153/t cfr, sulphur received at $300/t cfr and ammonia delivered at $350/t cfr already are making profits of about $50/t. But they also would still receive the 4pc MRP return and GST rebate.

The same proposal applies to imported TSP. The DOF suggests paying 4pc of the Rs25,000/t MRP, and the GST, plus the increase from the average Rabi import cost to importers.

By Tom Hampson

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