India may not provide subsidy on wheat exports

India may not provide subsidy on wheat exports

New Delhi: India is unlikely to provide any worthwhile subsidy on wheat export once the over two-year-old ban is lifted even as speculation is rife that the country may extend dole-outs for offloading its huge reserves to create storage space for fresh crops.

The Centre may instead enhance supply in the domestic market and pass on the benefit of huge stocks to people through its different schemes if it is to offload wheat at a subsidised rate in the international market.

“We may not export it at a subsidised rate after the ban is lifted. If the global prices are lower and demand is less, we may sell it in the domestic market and raise allocation under different schemes to ensure that prices are kept in check," a senior government official said.

“If we are to extend subsidy to export, why should we not provide the dole-out in the domestic market and benefit our own people," he added.

The government did not lift the ban on wheat exports, slapped in February 2007, even after building huge stocks as it played safe and did not want a repetition of the situation in 2006 and 2007 when India had to import a total of 73 lakh tonnes at higher prices to meet domestic demand, he said.

Earlier, the US Department of Agriculture (USDA) had said that India might need to extend an export subsidy as Indian wheat would otherwise be uncompetitive because of the high local support price of Rs1,080 a quintal.