WTO questioned India for not providing subsidy on Imported Fertilizer

Category: WTO Sub-category: World Trade Organisation
Document type: news

28-May-2011 | 10:36 hrs IST | Edited by: Tanusree Pal

World Trade Organization (WTO) has asked India about the exclusion of imported ammonium sulphate out of the ambit of Nutrient-Based Subsidy (NBS) policy. The international body has questioned India about providing subsidy only on indigenous ammonium sulphate and not on the imported fertilizer.

India is examining the issue raised by the WTO and will be responding soon.

The NBS policy, effective from April 1, 2010, provides subsidy for the 3 macro nutrients namely nitrogen (N), phosphorous (P) and potassium (K); 1 secondary nutrient namely sulphur (S) and 2 micro nutrients namely zinc and boron, on actual weight of the nutrient in the fertilizer. Apart from these, the NBS policy includes Di- ammonium phosphate (DAP), Mono- ammonium phosphates (MAP), Triple superphosphate (TSP), Muriate of potash (MoP), Ammonium sulphate, single superphosphate and 12 other complex fertilizers. The scheme will be extended to urea. The objective of NBS policy was to restore soil health by addressing the nutrient imbalances of NPK and the lack of secondary and micro nutrients through use of fertilizers on specific soil-moisture conditions and crop needs as well as to provide incentive for innovation in fertilizer products.

Presently, India has fixed the subsidy of Rs 5,979 per tonnes for the indigenous produce of ammonium sulphate only to ensure the fertilizer is available at reasonable price in the domestic market. It is also providing subsidy on 22 grades of phosphorous and potassium fertilizers under the NBS Policy on both indigenous and imported fertilizers.

Ammonium Sulphate is a by-product of Caprolactum (a petro-chemical product used in making of nylon-6). It consists of Nitrogen and Sulphur and is a balanced fertilizer. It is also consider as an agro- economically effective fertilizer. Ammonium sulphate is manufactured by the Fertilizers and Chemicals Travancore Ltd (FACT) and Gujarat State Fertilizers and Chemicals Ltd (GSFC) with an aggregate annual production of over 3 lakhs tonnes.

According to the Industry experts, the cost of ammonium sulphate is expected to be around Rs 15,000 per tonne that are made available at retail price of Rs 8,000-9,000 per tonne after subsidizing it. The global price of ammonium sulphate is about US $ 210 per tonne.

External Link:
The official website of WTO - The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.

Nutrient Based Subsidy (NBS) Scheme for Fertilizers is expected to promote balanced fertilization and consequently increase agriculture productivity in the country through higher usage of secondary and micro nutrients. See also the Press Release by Govt. of India.