The government of India has “prohibited” wheat exports, citing a threat to food security. The decision was made on Friday in response to a “sudden surge in global wheat prices originating from a variety of circumstances,” according to the Ministry of Commerce and Industry. The directive came two days after the government planned to send trade delegations to a number of countries to investigate wheat export opportunities.
The Russian invasion of Ukraine, a major wheat-producing country and a significant supplier to the European market, has destabilized the global agriculture market. Apart from national necessities, the decree also mentions the South Asian neighborhood’s goals in coping with the global wheat price surge.
India is a vital wheat supplier to its neighbors
New Delhi is a vital wheat supplier to its neighbors. Bangladesh is another major importer of Indian wheat, in addition to Afghanistan, which recently received substantial consignments of wheat from India on humanitarian grounds. In the years 2021-2022, India produced roughly 7 million tonnes of wheat, of which Bangladesh imported nearly half.
The official notification’s focus on “neighborhood” reveals that India is mindful that a lack of wheat in the domestic market could harm neighboring economies.
However, according to the Ministry’s decision, wheat exports will be permitted “in the case of shipments for which an irrevocable letter of credit (ICLC) has been obtained on or before the date of this Notification.” Only after obtaining the relevant approvals will export be permitted on a Government to Government (G2G) basis. Export of onion seeds is likewise restricted, according to the Ministry of Commerce and Industry. Both the directives for wheat and onion seeds went into effect right away.