India Bans Wheat Exports 2 Days After Announcing Massive Trade Goal

India has banned wheat exports with immediate effect as part of its steps to control the spike in prices at home.

Only export shipments for which letters of credit have been issued on or before yesterday's notification will be allowed, the government said. 

Besides, the government will allow exports on requests from other countries, the notification issued by Directorate General of Foreign Trade (DGFT) said.

The notification said that the government had taken the decision "in order to manage the overall food security of the country and to support the needs of the neighbouring and other vulnerable countries".

Global buyers had been banking on India - the world's second largest wheat producer after China - for supplies after exports from the Black Sea region dropped since Russia's invasion of Ukraine in late February.

The move to ban wheat exports comes after huge crop loss due to a heatwave in March. The government is also under pressure to rein in inflation that surged to 7.79 per cent in April. 

Also, the move is a u-turn two days after the government announced its plans for a big export push. 
"The Centre will send trade delegations to Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon for exploring possibilities of boosting wheat exports from India. India has set a target of a record 10 million tonnes of wheat in the 2022-23 amid rising global demand for the grain globally," a government statement said Thursday. 

"There is a rise in the demand for Indian wheat in the global market, farmers, traders and exporters have been advised to follow all the quality norms of importing countries so that India emerges as a reliable supplier of wheat globally.

"We are extending our support to all the stakeholders in the wheat exports value chain for boosting shipment from the country," M Angamuthu, Chairman, Agricultural and Processed Food Products Exports Development Authority, said at a sensitisation meeting on wheat exports in Karnal, Haryana, according to the government release.

The Department of Commerce planned to organise several such meetings in major wheat growing states such as Punjab, Haryana, Madhya Pradesh, Uttar Pradesh and Rajasthan, it added.

Earlier this month, a Reuters report quoted a top official of the Ministry of Consumer Affairs, Food and Public Distribution as saying that India is not looking to curb wheat exports.

"There is no move to curb wheat exports, as the country has sufficient stocks of wheat," Food Secretary Sudhanshu Pandey had then said.

Prime Minister Narendra Modi, during his recent visit to Germany, told the Indian diaspora at an event that farmers of the country "have stepped forward to feed the world" amid a global shortage of wheat. "Whenever humanity is faced with a crisis, India comes up with a solution," he said.

Asked about the sudden change in plan, government sources said China is drawing food grains from India after crop loss led to food security concerns there. 

After five consecutive years of record harvests, India cut its wheat output forecast to 105 million tonnes from a February estimate of 111.3 tonnes after the heatwave hit crop yields.

In a separate notification, the DGFT announced the easing of export conditions for onion seeds. "The export policy of onion seeds has been put under the restricted category, with immediate fact," it said. The export of onion seeds had earlier been prohibited.