The GST Reduction on Farm Inputs from 12% to 5% is expected to accelerate precision agriculture and lower production costs for farmers. The fertilizer ministry informed Parliament that the reduced GST now applies to sprayers, drip irrigation systems, sprinklers and nozzles. This move will benefit small and marginal farmers who remain highly cost-sensitive.
GST Reduction on Farm Inputs: Fertilizer & Micronutrient Impact
The GST on micronutrient fertilizers was also cut from 12% to 5%, effective September 22, 2025. Fertilizer Minister JP Nadda told Parliament that farmers are now able to use recommended micronutrient doses more efficiently and at lower cost.
As per the Indian Micronutrient Manufacturers Association, farmers are saving:
₹140/acre in paddy
₹199/acre in sugarcane
₹446/acre in potato
₹146/acre in wheat
These savings encourage balanced nutrient application, improving crop quality and soil health.
GST Reduction on Farm Inputs for Manufacturing & Raw Materials
GST on key fertilizer raw materials such as ammonia and sulphuric acid has also dropped from 18% to 5%. This reduction lowers working capital pressure, reduces input tax credit accumulation and improves cash flow for manufacturers. Consequently, domestic fertilizer output is expected to increase, supporting nutrient availability for farmers.
GST Reduction on Farm Inputs Encourages Bio-Pesticide Adoption
The GST cut on bio-pesticides — from 12% to 5% — will promote integrated pest management (IPM) and reduce reliance on synthetic chemicals. The ministry said that lower prices will make eco-friendly sprays more accessible and help farmers shift to safer biological alternatives aligned with organic farming goals.
Cheaper Equipment to Strengthen Precision Agriculture
The ministry stated that cheaper sprayers and irrigation tools will speed up the adoption of precise spraying and fertilization techniques. This will enable farmers to use inputs more efficiently and increase yield output without increasing costs.
