Wheat import duty increased to 40%
The government has increased the import duty on wheat to 40% from 30% in a bid to boost offtake of domestically produced grain.
The decision, announced on Friday, comes in the backdrop of the government’s plan of sell wheat in the open market to offload excess grain from the storage units of Food Corporation of India and state agencies.
A senior official said higher duty has made import of wheat, especially of cheaper grains from Russia, unviable for flour mills. When mills purchase more from overseas, it pushes down the price that farmers get for their produce. “Last year, we were able to sell 7 million tonnes of wheat under open sale to millers. This year also we are likely to sell that much only. The hike in duty would ensure that millers’ wheat purchase benefits Indian farmers only,” the official told ET. A flour miller said, “If customs duty was not raised, the government’s open sale of wheat to millers and biscuit makers could be affected.”
The government plans to sell 10 million tonnes of wheat and 2 million tonnes of rice in the open market.
An oversupply in the domestic market due to back-to-back bumper production of foodgrains has put wheat prices under pressure in the country. This year, India is likely to produce 99.12 million tonnes of the grain.
The government first imposed 10% import duty on wheat in March 2017. In November the same year, it doubled it to 20%, and then raised it to 30% in May 2018 in order to restrict imports.
Source :- Economictimes.indiatimes.com