Background: Fertilizer subsidy is a key component of India’s agricultural policy, ensuring the availability of fertilizers at affordable prices and supporting national food security. However, the increasing fiscal burden of subsidies, coupled with excessive dependence on urea and imbalanced nutrient application, has raised concerns regarding the long-term economic and environmental sustainability of the existing subsidy regime. The present study was undertaken to analyse the trends in fertilizer subsidy disbursements in India and to examine the changing composition of subsidy allocation during 2001–2002 to 2022–2023.

Methods: The study was based on secondary data collected from official publications and government reports. Fertilizer subsidy trends were analysed using descriptive statistical techniques to assess changes in total subsidy expenditure, nutrient-wise subsidy allocation and the impact of major policy interventions, including the introduction of the Nutrient Based Subsidy (NBS) scheme in 2010.

Result: The analysis revealed that fertilizer subsidy increased substantially from ₹12,695.02 crore in 2001-2002 to a record ₹ 2,54,798.88 crore in 2022-2023, primarily due to rising international fertilizer prices, increased domestic demand and supply disruptions during the COVID-19 pandemic. Although the NBS scheme was introduced to encourage balanced nutrient use, urea continued to receive the largest share of subsidies, leading to excessive consumption, nutrient imbalance and adverse environmental consequences. The findings highlight the need for comprehensive policy reforms, including the integration of urea under the NBS framework, promotion of balanced fertilization practices and greater encouragement of organic and alternative nutrient sources to improve the efficiency, fiscal sustainability and environmental performance of India’s fertilizer subsidy system.