India Restricts Wheat Flour Export To Curb Rising Prices In Domestic Market

Prime Minister Narendra Modi led Union Cabinet on Thursday (25 August) approved a policy to restrict export of wheat flour to curb the rising prices in the domestic market.

The Cabinet approved a proposal for amendment of policy of exemption for Wheat or Meslin Flour from export restrictions/ban.

Meslin Flour is a wheat and rye blend that is sown and harvested together. It is typically traded alongside wheat.

"This approval will allow to put a restriction on the export of Wheat Flour which will ensure a curb on rising prices of the Wheat Flour and ensure food security of the most vulnerable sections of the society," the Ministry of Commerce and Industry said in a statement.

The ministry also informed that the Directorate General of Foreign Trade (DGFT) will issue a notification to this effect.

According to the ministry, earlier, there was a policy not to prohibit or put any restrictions on the export of Wheat flour. Therefore, a partial modification of the policy was required by withdrawing the exemption from ban/restrictions on export for Wheat Flour in order to ensure food security and put a check on mounting prices of Wheat flour in the country.

Russia and Ukraine are the major exporters of wheat accounting for around one-fourth of the global wheat trade. The conflict between them led to the global wheat supply chain disruptions increasing demand of Indian wheat.

As a result, the price of wheat in domestic market showed an increase. In order to ensure food security of 1.4 billion people of the country, the decision was taken to put a prohibition on export of wheat in May 2022.

However, due to prohibition on export of wheat, the demand for wheat flour has increased in foreign markets and it’ s exports from India have registered a growth of 200 per cent during April-July 2022 compared to the corresponding period in 2021.

The increased demand for wheat flour in international market led to significant price rise of wheat flour in the domestic market.