Low output estimate: India bans wheat exports in policy reversal
India has banned wheat exports with immediate effect as part of its efforts to limit hike in domestic prices. Authorities said only export shipments for which letters of credit were issued on or before Friday—when the notification was issued—would be approved. However, the government will permit exports at the request of foreign countries, as per the Directorate General of Foreign Trade's (DGFT) statement.
- India is now the world's second-largest wheat producer, only after China.
- Many countries were relying on India for wheat supply, particularly after shipments from the Black Sea area stopped following Russia's invasion of Ukraine in February.
- The decision to restrict wheat follows the huge harvest misfortune due to the heatwave.
- The DGFT is also under pressure due to high inflation rates in the county.
The decision to ban wheat export has been taken "in order to manage the overall food security of the country" and fulfill the needs of neighboring and other vulnerable countries. Officials told NDTV that the main reason for the decision is that China is drawing food grains from India after crop loss led to food security concerns there.
The prohibition is considered a dramatic reversal of the Centre's ambitions for a large export drive. It was planning to send trade delegations to several countries to investigate the possibility of increasing wheat exports. "India has set a target of a record 10 million tons of wheat in 2022-23 amid rising global demand for the grain," the government said in a statement on Thursday.
"There is no move to curb wheat exports, as the country has sufficient stocks of wheat," Food Secretary Sudhanshu Pandey earlier told Reuters. Notably, Prime Minister Narendra Modi had also boasted about India's ability to feed the world through wheat exports. During a recent visit to Germany, he stated that Indian farmers have come forward "to feed the world" despite a global wheat scarcity.
According to official estimates, India has reduced its wheat output expectation by 6.3 tons as a result of the heatwave. Previously, the country had five consecutive years of record crops. Meanwhile, the DGFT had previously declared that export limitations for onion seeds will be relaxed. "The export policy of onion seeds has been put under the restricted category, with immediate effect," it said.