India bans wheat exports to control domestic prices

India bans wheat exports to control domestic prices
Image for representational purpose only.Source: Thebluediamondgallery

New Delhi, May 14: With retail prices of wheat and wheat flour rising by 14-20 per cent in the last one year, the government has banned wheat exports to control rising domestic prices and meet the foodgrain requirement of neighbouring and vulnerable countries.

"The export policy of wheat is prohibited with immediate effect ," the Directorate General of Foreign Trade (DGFT) said in a notification issued late Friday. The export shipments for which irrevocable letters of credit (LoC) have been issued on or before the date of this notification will be allowed.

The opposition party Congress criticised the government for imposing the ban, saying it has taken a 'U turn' on the issue, but the top government officials justified the move stating that the restrictions have been taken at the "right time" and primarily to tame inflation.

"When publicity drives decisions, you get Policy Bankruptcy," Congress leader Rahul Gandhi tweeted.

Former Finance Minister P Chidambaram said, "...banning the export of wheat is an anti-farmer measure. It deprives the farmer of reaping the benefits of higher export prices. It is an anti-farmer measure and I am not surprised, this government has never been very friendly to the farmer."

According to the DGFT notification, wheat exports will be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments.

India's wheat exports stood at an all-time high of 7 million tonnes, valuing USD 2.05 billion, in 2021-22 fiscal year on better demand for Indian wheat from overseas. Of the total wheat exports, around 50 per cent of shipments were exported to Bangladesh in the last fiscal.

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