Govt not planning to hike import duty on wheat to 25% anytime soon

The government has no immediate plans to further increase import duty on wheat to 25 per cent as overseas purchase of the grain is not being undertaken even at the current customs duty level.

On March 28, import duty of 10 per cent was slapped on wheat to curb shipments in view of record domestic output at around 98 million tonnes in 2016-17 crop year (July-June). Prior to that there was no duty at all for nearly four months.

“When imports are not happening at the existing import duty, there is no question of further increasing it. Moreover, we have not received any such proposal as of now,” Food Minister Ram Vilas Paswan told PTI in an interview.

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About 5.5 million tonnes of wheat has been imported by private traders till March-end and much of it at a zero customs duty, he said.

Also, there is adequate supplies in the domestic market as the new crop expected to be a bumper and has started hitting the mandis. Both government and private players are buying from farmers, he added.

On the government’s wheat procurement, Paswan said with arrival of new crop in full swing, state-run Food Corporation of India (FCI) and state agencies are buying the grain to build up the buffer stock—which plummeted to below 7 million tonnes.

So far, more than 20 million tonnes of wheat has been procured by these agencies at the minimum support price (MSP), he said. Much of the wheat is purchased in the first four months of the procurement season (April-March).

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“Looking at the pace of procurement, we expect wheat procurement to exceed the target of 33 million tonnes set for this year,” Paswan noted.Wheat procurement in Haryana is almost completed as over 6.4 million tonnes has been purchased so far, while about 8.8 million tonnes has been bought in Punjab, as per the ministry’s data.

A senior Food Ministry official said that there is no need to restrict imports at present as domestic prices are ruling well above the MSP for the benefit of farmers, as also retail rates are under check in the interest of consumers.

The Agriculture Ministry has indicated that wheat output would be a record 98 million tonnes in 2016-17, although officially it is maintaining 96.64 million tonnes in its second estimate.