Government may hike import duty on wheat to 20-25 per cent

By: |
New Delhi | Published: October 4, 2017 6:11:04 PM

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

import duty, hike import duty, import duty on  wheat, hike on import duty on wheat, cheap shipment, positive price signalIn March, the government had imposed 10 per cent import duty on wheat to contain sharp fall in local prices in view of bumper crop of 98.38 million tonnes in 2016-17 crop year (July-June). (Image: Reuters)

The government is likely to raise import duty on wheat to 20-25 per cent from 10 per cent to curb cheap shipments and give positive price signal to farmers who will start sowing winter crop after the Diwali festival, an official source said. “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 source said. In March, the government had imposed 10 per cent import duty on wheat to contain sharp fall in local prices in view of bumper crop of 98.38 million tonnes in 2016-17 crop year (July-June).

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

The 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 spurt in rates in anticipation of lower crop in Australia. Even domestic rates have started inching up, the data showed.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1Job cuts in India: Layoffs in over 120 companies, here is why
27th Pay Commission report and more in focus as Centre’s spending quality falls
3Petrol, diesel prices fall as Modi government cuts excise duty by Rs 2 litre; move to cost Rs 13,000 cr