Govt considers removal of import duty on wheat flour

Written by ASHOK B SHARMA | New Delhi, Aug 12 | Updated: Aug 13 2007, 04:45am hrs
The government is planning to allow import of wheat flour by reducing the effective duty from 36.4% to zero. The committee of secretaries (CoS) presided over by KM Chandrasekhar last week after reviewing the wheat import situation has recommended that the government facilitate import of wheat flour by reducing the effective duty to zero. The note for allowing wheat flour import at zero duty was moved by the ministry of food and consumer affairs.

Earlier, the Union agriculture minister, Sharad Pawar had said that the government would import 5 million tonne wheat this year against zero duty and relaxed quarantine norms. Subsequently the State Trading Corporation of India (STC) floated two successive tenders inviting global bidders to supply one million tonne wheat. After canceling the first tender, government decided to import 5,11,000 tonne of wheat at prices ranging from $318 to $329 a tonne. As the global prices of wheat are seen appreciating, the government is faced with the problem of justifying imports at high prices. However, Pawar had said that imports were being done not due to scarcity of wheat in country but with a view to replenish the buffer stock.

The government is planning to allow import of wheat flour against zero duty as this will help the processing industry, said a senior official in the Union ministry for food and consumer affairs. However, it is not clear at this stage whether the government will import wheat flour on its own account or allow imports by the private sector.It is just a decision taken by CoS. This has to be approved by the Cabinet Committee on Prices or the Cabinet Committee on Economic Affairs, said the official.