Remove wheat import duty till Feb for food security: FCI
NEW DELHI : Food Corp. of India (FCI) has recommended the finance ministry remove import duty on wheat till February 2024 till fresh arrivals start to maintain the country’s food security and arrest rising food prices, a government official said. This recommendation comes over a year after the government banned wheat exports due to brutal heat waves that damaged wheat crops, sparking concerns about wheat availability in the country.
Food prices have been on the rise globally against the backdrop of the Russia-Ukraine war but had begun showing signs of easing, thanks to the Black Sea grain deal under which Russia agreed to allow wheat to be exported from the three ports in the conflict-hit region. However, prices have resumed the upward trend, with Russia pulling out of the deal last month, stating that the deal was only helping Western countries and not the African nations in need. Soon after, India banned exports of non-basmati white rice on 20 July.
“We have proposed the elimination of duty on wheat as against a 5-10% reduction on the ground that the latter would only be beneficial till August. Russian wheat is cheaper than Australian produce and can be imported. Harvest season in Russia is currently going on, and this is the peak time for exporters to sign contracts," the official said.
Notably, the current import duty on wheat is 40% and has been at this level since April 2019. Experts said the global price of wheat is currently lower than domestic prices, and a tariff reduction on imports could help cool prices further. Inflation in wheat is currently above 12% even as the government has taken multiple steps, from banning exports to conducting open market operations.
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