Union Minister JP Nadda informed Parliament on Friday that the government’s decision on September 22, 2025, to cut GST on micronutrient fertilizers from 12% to 5% has lowered production costs for small and marginal farmers, who are highly affected by price changes.
Explaining the impact of this move, Nadda said that reduced input expenses have enabled farmers to apply the recommended levels of micronutrients. “As per the 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,” Financial Express quoted JP Nadda as saying.
Nadda further noted that lowering the GST on essential raw materials such as ammonia and sulphuric acid, from 18% to 5%, has eased working capital requirements, minimized the buildup of input tax credit, and enhanced cash flows for fertilizer manufacturers. This, he said, will strengthen domestic production and ensure better availability of soil nutrients for farmers.
The minister pointed out that decreasing GST on bio-pesticides from 12% to 5% will bring down input costs and encourage broader adoption of integrated pest management practices. Nadda emphasized that “Competitive prices would support a gradual shift from synthetic chemical pesticides towards safer biological alternatives,” while also indicating that this tax cut supports government initiatives promoting organic and natural farming, in line with the goal of sustainable and residue-free agriculture.
According to a statement, cutting GST from 12% to 5% on mechanical sprayers, sprinklers, drip irrigation systems, and nozzles is likely to accelerate the adoption of precision agriculture. The statement added, “This reform would make plant protection and irrigation equipment more affordable, thereby encouraging farmers to adopt scientific spraying practices and efficient pesticide application technologies,” FE reported.
ALSO READ: ‘Rare Goldilocks Period’: RBI Governor points to India’s high economic growth, low inflation phase
