India’s GST reform: reducing the tax rate on Nitric Acid (HNO₃), Sulphuric Acid (H₂SO₄), and Ammonia (NH₃) from 18 per cent to 5 per cent under a two-slab system, effective from 22 September 2025 resolves the inverted duty structure. This adjustment reduces production overheads, fortifies the resilience of fertiliser and chemical supply chains. Analysis of price trends during the last few months suggests that, following the GST rate reduction, domestic prices of these chemicals are projected to decline, reflecting lower tax incidence and improved cost efficiencies.

This will:

(a) materially improve downstream manufacturer cash flows and margins,

(b) make Indian producers more cost-competitive in export markets, and

(c) stimulate incremental consumption in fertiliser and related segments as effective input costs fall and purchasing power across the chain improves.