In a knee-jerk reaction, the Government has banned wheat exports with effect from May 13, with some minor exceptions for those who have irrevocable letters of credit or where the governments of importing countries request the Indian government for food security purposes.
About:
This comes as a shock because only a month ago, Prime Minister Narendra Modi had said that if WTO allows us to export grains, India will start exporting from tomorrow to feed the world.
Possible reasons
Revised estimates of wheat production are much lower than the estimated 111 mmt (million metric tonnes). Wheat procurement is likely to end up at around 19 to 20 mmt by June-end against the more than 43 mmt last year.
Another factor could be that the April ’22 wheat inflation is at 9.59 per cent (y-o-y) against overall cereal inflation of 5.96 per cent.
Criticism: No matter what the rationale is, it hits the credibility of India as a reliable supplier of anything in global markets. It conveys that we don’t have any credible export policy as it can turn its back at the drop of a hat.
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