As part of its effort to rein in its fiscal deficit, the government on Wednesday decided to cut in subsidy on potash and phosphate-based fertilisers for the current fiscal year.

The government slashed subsidies for diammonium phosphate (DAP) and muriate of potash (MoP) by 14 per cent and 21.5 per cent to Rs 12,350 and Rs 11,300 per tonne for the FY2013-14.

A statement released by the government said, "According to the new rates, the total subsidy for the potash and phosphate fertilisers for the financial year 2013-14 would be reduced by around 15 percent."

The cuts in the subsidy on fertilisers have been made as the global prices of potash and phosphate have declined considerably.

Despite its decision to cut the subsidy, the government believes that falling global prices of potash and phosphate would bring the maximum retail prices of DAP and MoP down by around Rs 1,500 and Rs 1,000 per tonne, respectively. During the last rabi season, DAP and MoP were sold at Rs 24,000 and Rs 17,000 per tonne.

It may be noted here that India imports nearly 90 per cent of its phosphate and cent per cent its potash from foreign countries.

The list of major potash suppliers to India includes Potash Corp, Mosaic Co, Agrium Inc, Uralkali, Arab Potash Co, Germany's K+S AG, and ICL Israel Chemicals.