India discussing to increase import duty on wheat to 20-25 per cent from 10 per cent to give positive price signal and encourage local farmers to grow wheat on larger land.

The Indian 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, Times of India reported. “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,” a source told to newspaper. 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).

As farmers start planting of winter wheat crop from end of this month, the government wants to give positive price signal and encourage farmers to grow wheat on larger land, 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.

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.