Indian Government might need to import wheat to curb inflation related to grains. Earlier, heat waves in March caused production of wheat to go down, and that caused a rise in expenses for crores of Indians who heavily live on foods made of wheat like chappatis, etc. The Russia-Ukraine war has also caused a shortage and rise in prices of wheat in the international market.

India had already curtailed exports of wheat in May. Also, reserves for State have gone down to the lowest for the month in the last 14 years, as per the Food Corporation of India (FCI). At the same time, the inflation of wheat raised to 12%. Consumer wheat inflation surged more than 11 % while wholesale prices went up by 13.6% in July, as per official data.

Government Actions

The threat of shortage and increase in prices has forced the government to come up with a plan for buying from foreign countries. As per sources, the government is thinking of either decreasing or waiving off 40% import tax on wheat, so that people can import grains without hassle. These talks are still in discussion and private.

Sonal Varma, an economist, said that “Given a lot of the war risk premium has come off from global wheat prices, India can look at augmenting its domestic wheat supply via more imports. However, since domestic wholesale wheat prices are lower than global prices, a reduction in import duties will also be essential to make it a viable option.”

India is not a big exporter of wheat considering we are the second largest producer of wheat. Although on the other side, we also never imported much from foreign countries. That means we have been always self-dependent and able to meet our requirements by home production only.

Expected production for 2021-22 is around 107 million tons which is 4 million tons less than what was predicted in February. However, traders and flour millers estimate it from 98 million to 102 million tons only.

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