India Reconsidering Wheat Import Tax

Taylor HillmanIndustry News Release, Trade

wheat import tax
Two sources in the Indian government told Reuters this week that India could impose a 25-percent wheat import tax by the middle of March. That move would reinstate the tariff after a three-month gap as a response to recent large purchases from overseas.

India is the world’s second-biggest wheat producer.The government lowered the tariff from 25 percent to ten percent in September of 2016 before scrapping it entirely on December 8. After that move, private traders signed deals to import more than 5 million tons of wheat to help ease a supply shortage after two years of drought. Higher imports and expectations of a bumper crop this year have government officials seriously thinking about re-instituting the import tax. The Prime Minister of India and government officials want to curb imports to avoid a crash in local wheat prices, which would bring on a backlash from millions of poorer citizens. Many businesses that use wheat find it cheaper to import the product from Australia rather than purchase it from the main wheat-growing areas in their own country.

From the National Association of Farm Broadcasting news service.