India raises MSP for rabi crops, with safflower receiving the largest increase

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India raises rabi MSPs

Highlights

The Union Cabinet approved an increase in MSPs for all six rabi crops for the 2027-28 marketing season, with safflower receiving the largest increase of Rs 675 per quintal.
The MSP revision is expected to result in an estimated total financial payout of Rs 90,962 crore to farmers and provide margins of 50-106 percent over production costs for the crops.
MSP payments for rabi crops could reach Rs 8.36 lakh crore between 2014-15 and 2025-26, more than three times higher than in the previous period.

This article was translated from the original. Read the original version by our correspondent here.

Price increases and government calculations

According to Forbes India, the Union Cabinet approved an increase in the MSP of all six mandatory rabi crops for the 2027-28 marketing season on Wednesday, just before the start of the rabi sowing season. The government said safflower's MSP receives the largest increase of Rs 675 per quintal, followed by a Rs 413 increase for rapeseed and mustard.

The MSP for lentils is raised by Rs 390 to Rs 7,390 per quintal, while barley rises by Rs 136 to Rs 2,286, chickpeas by Rs 83 to Rs 5,958, and wheat by Rs 25 to Rs 2,610 per quintal. The Cabinet estimates the total financial payout from this decision to farmers at Rs 90,962 crore.

The government says margins over the all-India weighted average cost of production are expected to be 106 percent for wheat, 96 percent for rapeseed and mustard, 92 percent for lentils, 59 percent for chickpeas, 58 percent for barley, and 50 percent for safflower. It also says the MSP revision is in line with the decision announced in the 2018-19 Union Budget to set MSP at at least 1.5 times the cost of production.

Broader impact on crop diversification and payouts

According to the government, higher MSPs for pulses and oilseeds are intended to promote crop diversification at a time when sowing decisions are about to be made. This is why relatively larger increases are seen for crops such as safflower, rapeseed and mustard, and lentils.

The decision is part of the total Rs 279,157 crore package announced in the Cabinet presentation, which also includes initiatives such as PM Dhara and the Intelligent Traffic Management System for the National Capital Region of Delhi. According to government data, MSP payments to wheat farmers amounted to Rs 7.31 lakh crore between 2014-15 and 2025-26, compared with Rs 2.56 lakh crore during 2004-05 to 2013-14.

MSP payments for all six rabi crops reached Rs 8.36 lakh crore during 2014-15 to 2025-26, significantly higher than the Rs 2.65 lakh crore recorded in the corresponding period from 2004-05 to 2013-14. This indicates that the MSP framework remains a major financial tool for supporting farm incomes and procurement policy.

Our previous report discussed the July 2026 Index of Services Production data, which showed broad-based expansion, with double-digit growth in 10 of 19 sub-sectors. The report also noted that while segments such as administrative services and retail trade remained strong, air transport declined and repair services contracted due to operational disruptions linked to the war in West Asia and fuel costs.

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