The Aryavarth Express
Agency (New Delhi): India is preparing to resume wheat imports after a six-year hiatus to replenish its depleted reserves and curb rising prices caused by three consecutive poor harvests. This move comes as the conclusion of general elections removes a key obstacle. According to sources, New Delhi is set to abandon the 40% import tax on wheat this year, allowing private traders and flour millers to import from leading exporters like Russia.
Officials and industry insiders revealed that the government might wait until after June to remove the import duty, coinciding with Russia’s wheat harvest. Although India’s import needs are not vast, they could influence global wheat prices, which recently hit a 10-month high in Chicago due to concerns over adverse weather affecting Russian output.
“There is a compelling case for the removal of the wheat import duty,” stated Pramod Kumar, president of the Roller Flour Millers’ Federation of India. “That is the best possible way to ensure sufficient supplies in the open market.”
A government source confirmed that the prevailing view is to remove the wheat import duty after June to facilitate private trade imports, with plans to reinstate the duty before wheat planting begins in October to protect local farmers’ interests.
Prime Minister Narendra Modi’s Bharatiya Janata Party is widely expected to win the ongoing election, which ends on June 1, with vote-counting scheduled for June 4.
Rajesh Paharia Jain, a New Delhi-based trader, suggested that about 3 million metric tons of imports would suffice, with Russia being the primary supplier. This import volume would prevent local price surges during the peak demand in October’s festival season.
After achieving five consecutive record harvests, India’s wheat production declined due to a sharp rise in temperatures, leading to a ban on exports. This year’s crop is forecasted to be 6.25% lower than the government estimate of 112 million metric tons.
Domestic wheat prices have remained above the minimum purchase rate of 2,275 rupees per 100 kg and have recently started to rise. Wheat stocks in state warehouses fell to 7.5 million metric tons in April, the lowest in 16 years, after the government sold over 10 million tons to control prices.
“The removal of the import duty will help us ensure that our own reserves don’t fall below a psychological benchmark of 10 million tons,” said a government official. Despite efforts, state procurement is unlikely to exceed 27 million metric tons against a target of 30-32 million.
India’s main opposition Congress party has promised to double the current grain supply under the world’s largest food welfare program if elected.
“Despite the recent rise in global prices, imports at zero duty are economically viable, and that’s why the new government should remove the duty to enable the trade to import,” reiterated Pramod Kumar.
