The government on Thursday, 25 August, decided to put restrictions on the export of wheat or meslin flour to curb rising prices of the commodity. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi.
The decision of the Cabinet "will now allow to put a restriction on the export of Wheat Flour which will ensure a curb on rising prices of wheat flour and ensure food security of the most vulnerable sections of the society," an official statement said.
Russia Ukraine War Increased Global Demand for Indian Wheat
The Directorate General of Foreign Trade (DGFT) will issue a notification to this effect. Russia and Ukraine are the major exporters of wheat, accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions, thus increasing the demand for Indian wheat.
As a result, the price of wheat in the domestic market has shown an increase. In order to ensure food security of the country, the government put a prohibition on export of wheat in May. However, this caused a jump in overseas demand for wheat flour.
Wheat flour exports from India have registered a growth of 200 percent during April-July 2022 compared to the corresponding period in 2021.The increased demand for wheat flour overseas led to significant price rise of the commodity in the domestic market.
Earlier, there was a policy not to prohibit or put any restriction on the export of wheat flour and therefore, a partial modification of the policy was required by withdrawing the exemption from ban/ restrictions on export in order to ensure food security and put a check on mounting prices of wheat flour in the country, the statement added.
"The Cabinet Committee on Economic Affairs...has approved the proposal for amendment of policy of exemption for wheat or meslin flour from export restrictions/ ban," it said. In July, a DGFT notification said the government had imposed a condition on exports of wheat flour or atta, maida and semolina.
"Export policy of wheat flour (atta) remains free but export shall be subject to recommendation of inter-ministerial committee on export of wheat," the notification had said.
When asked about the Cabinet decision, an official said that earlier the export regime for wheat flour was "free" but now it is restricted. In 2021-22, India exported wheat flour worth USD 246 million. The exports stood at about USD 128 million during April-June this fiscal.
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)