Remove wheat import duty till Feb for food security: FCI

Source: The post is based on the article “Remove wheat import duty till Feb for food security: FCI”  published in Livemint on 5th August 2023. 

What is the News?

Food Corporation of India(FCI) has recommended the government to remove import duty on wheat till February 2024.

Why has the Food Corporation of India(FCI) asked the government to remove import duty on wheat?

Food prices have been on the rise globally against the backdrop of the Russia-Ukraine war.

But the prices began showing signs of easing, thanks to the Black Sea grain deal under which Russia agreed to allow wheat to be exported from the three ports in the conflict-hit region.

However, prices have resumed the upward trend, with Russia pulling out of the deal last month, stating that the deal was only helping Western countries and not the African nations in need.

Soon after, India also restricted wheat exports to protect its own food supplies. 

However, Inflation in wheat is currently above 12% even as the government has taken multiple steps such as banning exports to conducting open market operations.

Hence, that’s why FCI has suggested the government to remove import duty on wheat till February 2024.

This is because Russian wheat is cheaper and can be imported. Harvest season in Russia is currently going on and this is the peak time for exporters to sign contracts.

Note: The current import duty on wheat is 40% and has been at this level since April 2019.