India bans wheat export with immediate effect to control inflation
The government stated that the abrupt increase in wheat prices was threatening the food security of India, neighbouring nations, and other vulnerable countries.
The ministry of commerce announced a restriction on wheat exports with immediate effect late Friday night. The Directorate General of Foreign Trade (DGDT) stated in a May 13 notification that the wheat export embargo was enforced owing to a rapid increase in the price of the food grain on the worldwide market, and that it was implemented as part of steps to control increasing local costs. The government also stated in the decree that the wheat export restriction was imposed to safeguard overall food security.
However, export shipments for which irrevocable letters of credit (LoC) were granted on or before the date of this notification will be permitted, according to the DGFT. "Exports will also be permitted depending on permission provided by the Government of India to other nations in order to address their food security needs and at the request of their governments."
"There is a rapid surge in global wheat prices due to a variety of circumstances, putting India's, neighbouring, and other vulnerable nations' food security at risk," the DGFT stated in the warning. "The government of India is dedicated to meeting the food security needs of India, neighbouring and other vulnerable developing nations that have been negatively affected by abrupt changes in the global wheat market and are unable to obtain appropriate wheat supply," the directive added.
The announcement from the DGFT, who works under the commerce ministry, also stated that the government was adopting the move to restrict wheat export from India in order to manage the country's overall food security and to meet the requirements of neighbouring and other vulnerable nations.
The decision came a day after India said that it will send trade teams to nine countries, including Morocco, Tunisia, and Indonesia, to investigate the possibility of increasing wheat shipments as it aims to export 10 million tonnes of the crop in 2022-23.
However, it was reported on Friday that India's wheat exports may decrease due to mounting worries about a drop in its inventories with the Food Corporation of India as a result of aggressive buying from private players and an overall output deficiency.