Import duty on wheat increased to 25%, to continue till March
In an effort to curb import of wheat in the country, the government has increase the basic customs duty on the food grain to 25%. The hike in import duty will remain effective till the end of the current financial year. The decision came amid concern over rising cheap imports of wheat from countries like Australia and France due to falling commodity prices in the global market. “In view of the continued fall in international prices of wheat and the anticipated adverse impact of increased imports during the first half of this financial year, basic customs duty on wheat has been increased from 10% to 25% for a period up to 31.03.2016,” a Finance Ministry statement said on Monday. Last time, the government had imposed a 10% import duty on wheat in August – for the first time since 2006 – after private flour millers started importing from Australia amid sluggish domestic supply of high-protein wheat used to make pasta and pizzas. Earlier, the Agriculture Ministry had also expressed concern saying that overseas buying might send a wrong signal on local prices when the country has surplus stocks, especially ahead of sowing of new crop from next month. Private firms have been resorting to importing protein-rich wheat as the domestic crops were damaged due to rains and hailstorms earlier this year. “Already 5,00,000 tonnes of premium Australian wheat has landed in the country and more imports are likely to take place with the private firms keen to purchase even paying 10% import duty taking advantage of fall in global prices,” a government statement had said last week. Millers also prefer buying wheat from abroad instead of damaged food grain from the government stock. “The government relaxed procurement norms and procured rain-affected sub-standard quality wheat, which is being sold to millers. When we get sub-standard quality wheat under Open Market Sale Scheme (OMSS), naturally, the quality products cannot be processed, for which, we need better wheat quality for blending. Hence, we are importing high quality wheat in order to meet the parameters for end products,” Veena Sharma, Secretary, Roller Flour Millers’ Federation of India (RFMFI), had told The Dollar Business in an earlier interaction. Analysts believe that increasing import duty will only increase the input cost of wheat-based food products.
October 20, 2015 | 3:49pm IST.
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