The reduction in GST on micronutrient fertilisers from 12% to 5% as announced by the government on September 22, 2025 has reduced the cost of production of small and marginal farmers who are often sensitive to price fluctuations, fertilizer minister JP Nadda said in parliament on Friday.
What did Nadda say?
Stating lower input costs has helped farmers in application of recommended micronutrient doses, Nadda said “as per Indian micro-fertilizers manufacturers association, due to reduction of GST from 12% to 5%, savings would be of Rs. 140/acre in paddy, Rs 199/acre in sugarcane, Rs. 446/acre in potato and Rs. 146/acre in wheat to farmers,”.
The lowering GST rates from 18% to 5% on critical raw materials including ammonia and sulphuric acids for manufacturing fertilizer has reduced the working capital requirement, lowers the accumulation of input tax credit and improves cash flows for manufacturers , which would boost domestic production and support availability of soil nutrients to the farmer, Nadda said.
Reduction of GST on bio-pesticides
Reduction of GST on bio-pesticides from 12% to 5% would lower input costs and would promote wider adoption of integrated pest management practices, wherein bio-pesticides play a central role in reducing pest resistance and maintaining ecological balance.
“Competitive prices would support a gradual shift from synthetic chemical pesticides towards safer biological alternatives,” Nadda said in a parliament. He stated that the tax relief directly supports the government’s initiatives on organic and natural farming aligning with the vision of sustainable and residue-free agriculture.
The reduction of GST from 12% to 5% on mechanical sprayers, sprinklers, drip irrigation systems, and nozzles are expected to boost precision agriculture, according to a statement by the fertilizer ministry in the parliament.
“This reform would make plant protection and irrigation equipment more affordable, thereby encouraging farmers to adopt scientific spraying practices and efficient pesticide application technologies,” it stated.