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The proposed 23.5 per cent export duty on fertiliser exports by Russia will increase the cost for India by about $70 per ton, as per a report by Prabhudas Lilladher Pvt Ltd.

In the research report, Prabhudas Lilladher said while the majority of Russian fertiliser exports are to Europe, there will be trickle down impact on India as well.

"The cost of imports is likely to go up by about $70/tonne. However, we understand that the recent government announcement on reduction in fertiliser subsidy for 2HFY23 doesn't get changed," the report said.

The Indian government has already closed their book for FY23 (in terms of subsidy allocation).

According to the report, the subsidy for FY24 is likely to be elevated and the domestic industry is likely to stock up imported fertilisers in 3Q for- Di-ammonium Phosphate (DAP), Nitrogen, Phosphorous and Potassium (NPK) and Muriate of Potash (MOP) to some extend for the next kharif season.

The report also said the fertiliser prices will inch up in the global markets and as long as the crop prices holds up both in global as well as domestic market the industry would be in a position to pass this on to the farmers, the report notes.

According to Prabhudas Lilladher, Russia will impose an export duty of 23.5 per cent on all types of fertiliser with a "cut-off price " set at $450/tonne.

The $450/ton is said to be the price below which exporters would not pay export duty on an FOB basis. For every tonne of any fertilizer sold above $450/ton the 23.5 per cent tax will be applied.

The duty is likely to come into force from 1 January 2023, said Prabhudas Lilladher citing a local source.