In a major U-turn amid calls for ban/cap to curb rising prices, India decided to ban wheat exports with immediate effect. An official notification called the action a part of measures to control rising domestic prices.
However, the export shipments for which irrevocable letters of credit (LoC) have been issued on or before the date of this notification will be allowed, according to the Directorate General of Foreign Trade (DGFT) notification dated May 13.
To aid neighbours
Following the G7 criticism of India’s decision, the Indian embassy in Berlin explained in a statement that the move by India will ensure the fulfilment of the genuine needs of India’s neighbours and food-deficit countries and that the restrictions imposed won’t come in the way of meeting prior commitments.
The embassy said India announced an amendment in India’s export policy for wheat to manage the overall food security situation in India and to support the needs of neighbouring and vulnerable countries that are adversely affected by the sudden changes in the global market for wheat and are unable to access adequate wheat supplies.
However, it added, this restriction would not apply in cases where prior commitments have been made by “private trade as well as in situations where permission is granted by the Government of India to other countries to meet their food security needs and on the requests of their governments.”
“The amendment order serves three main purposes: it ensures India’s food security and checks inflation, it helps other countries facing food deficit, and it maintains India’s reliability as a supplier. The amendment also aims to provide a clear direction to the wheat market to prevent hoarding of wheat supplies. The decision to regulate wheat exports will also control inflationary expectations,” it said.
Procurement extended
A day after imposing strict export controls, the Centre extended wheat procurement in six states, including Uttar Pradesh and Madhya Pradesh, by up to three weeks with the exercise now targeted to end on May 31. The wheat procurement was scheduled to end on May 10 in Rajasthan and on May 15 in UP, MP, Bihar, Gujarat and Himachal Pradesh. The food ministry said the Food Corporation of India (FCI) will continue with wheat procurement for the central pool.
