Though India has turned its fate in food production from rags to riches but the sustainability of it remains an important issue. Government policies in the form of subsidies have been a consistent feature to support farmers making inputs sustainable. Fertilizer is an important input which is heavily subsidized. But this support has posed a threat to environmental sustainability since the inputs were not used judiciously. Thus, in this light, this chapter is designed to understand the current status of fertilizer subsidies in India, its growth rate and understanding whether it being a sustainable option. For this purpose, agri-environment sustainability scores of major states were regressed upon agricultural development scores, fertilizer subsidies per ha, Human development Index (HDI) scores and total subsidies as per cent of GDP. The results depict that agricultural development, fertilizer subsidies and HDI were found to be negatively related to agri-environment sustainability scores of different states. The overuse of limited resources and pollution of environment has necessitated such study and the empirical findings shows that policies to be implicated keeping agri-environment sustainability in light. In order to have sustainable agricultural productivity, the government policies need to be efficient and effective.