India's federal government on Monday allowed duty-free wheat imports by private trade to stem rising prices and augment market supplies. "As of today there is no duty on imports of wheat," Farm Minister Shared Pawar told reporters on the sidelines of a fisheries department meeting.
"This facility will be available for the next 4-5 months, may be until December or January. This decision has been taken already and the orders will be issued shortly," he said. India, with the world's largest population after China, needs to maintain a buffer stock to ensure adequate supplies for the poor and to keep market prices in check.
Following a poor crop India began buying wheat in March, for the first time in six years, to augment stocks with state-run Food Corporation of India that handles the public distribution system.
According to the Food Ministry, India's wheat stocks were estimated at 7.33 million tonnes on August 1, down from 12.9 million tonnes a year ago. In June, the government cut the import duty on wheat to 5 percent from 50 percent to boost supplies in the local market.
Since then private traders have contracted imports have about 500,000 to 600,000 tonnes, but many firms had been demanding the duties be scrapped altogether to boost supplies even more. Until now, only government-run agencies were allowed duty-free wheat imports. India's state-run State Trading Corporation has contracted imports of 3.8 million tonnes of wheat since March. Last week, it floated a fresh tender for 1.67 million tonnes. Pawar said it was unlikely the government would have to import more wheat.
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