From The Economic Times · Shambhavi Anand · · 50s
DAP subsidy shift to curb import costs
Government adjusts DAP subsidies to boost local production as sulphur prices rise
In brief
Government adjusts DAP subsidies to boost local production as sulphur prices rise Differential subsidies for DAP will vary based on production route to reduce import reliance Originally reported by The Economic Times.
DAP subsidy changes coming
Government plans differential subsidies for di-ammonium phosphate under Nutrient Based Subsidy scheme to encourage local production
“There can be three rates for the same product”
Sulphur prices driving change
Rising sulphur costs make domestic DAP production more expensive than imports
Three production routes
Indian manufacturers can process rock phosphate into phosphoric acid or import phosphoric acid directly for DAP
Subsidy differences
Subsidy rates will vary based on whether DAP is made from imported rock phosphate, phosphoric acid, or imported finished DAP
Cost structure impact
Margins are higher when DAP is produced using rock phosphate, so government wants companies to pass savings to farmers
The takeaway
Differential subsidies for DAP will vary based on production route to reduce import reliance
