Fertilizer price reform – the Indian government’s best move YTD

The government’s 18 February decision to raise the sale price of urea by 10 per cent – the first increase in eight years – and to free the selling prices of all other fertilizers has broad significance for investors in Indian equities beyond the financial benefits for companies in the bulk chemicals sector. The positive impact of this decision will be felt in three main areas:

Benefit #1: fiscal consolidation

The new fertilizer subsidy policy represents a serious first step towards...

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