India restricts export of wheat

The restriction on wheat exports comes as part of measures to control rising prices

The restriction on wheat exports comes as part of measures to control rising prices

Referring to threats to food safety, the government has “banned” the export of wheat. The decision was made on Friday, given the “sudden increase in global wheat prices due to many factors”, the Ministry of Trade and Industry has informed. Significantly, the order came two days after the government had decided to send trade delegations to a number of countries to investigate the possibilities of exporting wheat.

The global agricultural market has been destabilized by the Russian invasion of Ukraine, a large wheat-producing nation that is a major supplier to the European market. Apart from national requirements, the order also cites the priorities of the South Asian neighborhood in dealing with the increase in global wheat prices.

India is a vital supplier of wheat to its neighbors. Apart from Afghanistan, which recently received large consignments of wheat from India for humanitarian reasons, Bangladesh is another major importer of Indian wheat. India produced about 7 million tonnes of wheat in 2021-’22 and almost 50% of it was imported from Bangladesh.

The emphasis on “neighborhood” in the official notification shows that India is aware that a shortage of wheat in the domestic market could create affected neighboring economies.

However, the Ministry’s order stated that the export of wheat will be allowed “for shipments where an irrevocable letter of credit (ICLC) has been issued on or before the date of this notification”. Exports will also be allowed on a government (G2G) basis only after securing the necessary permits.

The Ministry of Trade and Industry also placed the export of onion seeds under the “prohibited” category. Both orders for wheat and onion seeds have entered into force immediately.

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