NEW DELHI: Faced with bumper production of wheat in an election year, the Central government has raised the import duty on wheat to 40 per cent from an already high 30 per cent to discourage millers from buying wheat from abroad.
India’s wheat production is estimated at a record 99.12 million tonnes in 2018-19 crop year, which runs from July to June, about 2 per cent higher than last year’s.
The government’s wheat stocks held by the Food Corporation of India (FCI) stood at 16.99 MT as of April 1. It is expected to buy another 35-40 MT of wheat this year, after which stock with it could touch 57 MT by end of May. “The higher duty will force millers who import a trickle of wheat to buy locally and help protect farm prices,” said Prof Biswajit Dhar of Jawaharlal Nehru University.
The Central government had, in a bid to improve farm incomes, raised the minimum support price of wheat, or the rate at which FCI buys from farmers, by 6 per cent to Rs 1,840 per 100 kg for 2019. This acts as a benchmark for the open market in wheat.
“This being an election year, we had to take permission from the Election Commission before the duty hike was announced. However, this increase was necessary to protect local farm interests,” said officials.