India Contemplates Removing Wheat Import Duty and Reducing Stock Limit Amid Suspected Hoarding

In response to suspicions of over 40 million tonnes of wheat being hoarded in the country, the Indian government is considering drastic measures to ensure the cereal’s ample availability in the domestic market. The authorities are deliberating to cut the wheat stock limit down to 2,000 tonnes from the existing 3,000 tonnes and, additionally, they may scrap the current import duty, which stands at 44 percent, including cess.

These proposed changes follow the government’s discovery of a substantial amount of wheat seemingly hoarded across the country, thereby evading the current stock limit regulations. The accumulation of such large wheat reserves could adversely impact the supply and prices in the domestic market, which the government seeks to prevent by implementing these measures.

Reducing the import duty on wheat to zero would incentivize importers and help increase the supply of wheat in the domestic market, potentially stabilizing prices. However, the government will also need to balance the needs of local wheat farmers, who might face competition from imported products if the import duty is removed.

The government’s decision underscores its commitment to ensuring food security for its citizens and maintaining stable prices in the domestic market. However, it remains to be seen how these measures will affect the overall wheat market, including farmers, traders, and consumers, in the long run.