Government May Hike Import Duty On Wheat To 20-25%

The government is likely to raise import duty on wheat to 20-25 percent from 10 percent to curb cheap shipments and give positive price signal to farmers who will start sowing the winter crop after Diwali, said a government official.

“Several discussions have been held on tweaking import duty of wheat. Currently, global prices are depressed and increase in import duty of wheat will be worked out accordingly. A final call will be taken soon,” the official said.

In March, the government had imposed 10 percent import duty on wheat to contain the sharp fall in local prices following bumper crop of 98.38 million tonnes in 2016-17 crop year (July-June).

As farmers start sowing the rabi (winter) crop from the end of this month, the government wants to give positive price signal and encourage farmers to grow wheat in more area, the official said.

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Trade data showed that private traders imported about 8.5 lakh tonnes of wheat since April at 10 per cent import duty. Another 1.5 lakh tonnes of shipments are expected to arrive.

Global prices were depressed for last few months, but there has been a spurt in rates in anticipation of lower crop in Australia. Even domestic rates have started inching up, the data showed.

The government does not want wheat growers to follow the way of pulses farmers who shifted to other crops this kharif season as prices remained lower just before the sowing period owing to bumper crop last year.