India set to resume wheat imports after 6 yrs

India plans to resume wheat imports after a six-year gap to replenish reserves and control domestic prices, Reuters reported on Wednesday. This decision comes as the general election nears its end, removing a previous obstacle to importing wheat.

India’s wheat stocks are low due to three years of poor harvests. The government plans to remove the 40 per cent import tax, allowing private traders to import wheat from countries like Russia.

The government is expected to remove the wheat import duty after the June harvest season and Russia’s wheat harvest.

Pramod Kumar, president of the Roller Flour Millers’ Federation of India, emphasised the importance of this move to ensure adequate supplies in the market.

The tax is expected to be reinstated before October, aligning with the upcoming wheat planting season, in order to safeguard the interests of domestic farmers.

Prime Minister Narendra Modi’s Bharatiya Janata Party is heavily favoured to win the ongoing general election, with votes being counted on June 4th. Traders anticipate initiating imports as soon as the government removes the import duty.

Industry estimates suggest that importing around three million metric tons of wheat, primarily from Russia, would help meet demand and prevent a price surge during the upcoming festival season in October.

This would also reduce pressure on the government to release large quantities from its reserves. India, a former top wheat producer, has faced production challenges due to rising temperatures, leading to a ban on exports in 2023.

The current harvest is expected to fall short of government projections, with a leading industry body forecasting a 6.25 per cent decrease from the estimated 112 million metric tons.