Friday, 27 May, 2022
HomeEconomyIndia bans immediate export of wheat to control rising domestic prices

India bans immediate export of wheat to control rising domestic prices

The country’s retail inflation surged to 7.79% in April, an 8-year high.

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New Delhi: The Narendra Modi government has banned the export of wheat with immediate effect in a bid to control rising domestic prices, said an order by the Directorate General of Foreign Trade (DGFT).

The DGFT notification, dated 13 May, however said that shipments for which “irrevocable letters of credit (LoC) have been issued” on or before the notification would be allowed to be exported.

India is the second-largest producer of wheat in the world, with a share of around 14.14 per cent of the total production in 2020. The country produces around 107.59 million MT of wheat annually and a major chunk of it goes towards domestic consumption.

“The export policy of wheat… is prohibited with immediate effect…,” the DGFT notification said.

The government, however, eased conditions for the export of onion seed, putting it under the restricted category. The export of onion seeds till now was completely prohibited.

DGFT also noted that wheat exports to other countries would be allowed only if the Centre gives permission —to meet food security needs of those nations.

A report in ThePrint earlier this month had noted how India’s restrictions on wheat exports will likely hurt neighboring countries like Bangladesh and Sri Lanka, and also affect some Middle Eastern and Asian markets.

The move comes after India’s retail inflation rose to an 8-year high of 7.79 per cent in April, “largely driven by rising fuel and food prices and staying well above the Reserve Bank of India’s upper tolerance limit for a fourth consecutive month”.

This also comes days after India decided to send trade delegations to countries such as Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon to explore the possibility of boosting wheat exports.

A Reuters poll revealed that food inflation reached a multi-month high in March globally and was “expected to remain elevated due to higher vegetable and cooking oil prices” across the world.

Energy prices across the world have surged since the Russian invasion of Ukraine early February.


Also read: India had dropped the ball & exported excess wheat in 2004-05. Modi govt shouldn’t repeat it


 

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