Indian government doubled the import duty on wheat to 20 per cent to curb cheap shipments and give positive price signal to farmers.
India has doubled its tariff on wheat imports. It also imposed import duty of 50 per cent on peas to check cheaper shipments from countries like Canada. The Central Board of Excise and Customs (CBEC) in a notification on the 8th of November said that it seeks “to increase rate of basic customs duty on Peas, (Pisum sativum) from present Nil rate to 50% and to increase rate of basic customs duty on wheat from 10% to 20%.” 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 tons in 2016-17 crop year (July-June).
Indian government wants to encourage farmers to grow wheat on a larger area. 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.
Most flour millers, biscuit and confectionary makers in the coastal towns of southern India find it cheaper to import, especially from Australia, than to buy the grain from farmers in the key producing states of Punjab, Haryana and Uttar Pradesh in north India and Madhya Pradesh in central India.