Centre holds off wheat export ban rollback to rein in prices ahead of polls, festivals
Despite meeting its procurement targets, the government is treading cautiously to avoid any move that could stoke retail food inflation and hand an ammunition to the opposition in the run-up to the polls.
New Delhi: The Centre has decided to delay lifting the ban on wheat and wheat product exports, prioritizing price stability during the upcoming festival and election seasons, according to two people familiar with the matter.
With assembly elections due in key states—Bihar, Assam, Kerala, Tamil Nadu, West Bengal and Puducherry—the price of staples like atta (wheat flour), maida (flour) and suji (semolina) has become a political priority.
Despite meeting procurement targets, the government is proceeding cautiously to avoid sparking retail food inflation, which is currently at its lowest, and giving the opposition parties political ammunition ahead of the polls.
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The expected surge in festive demand over the coming months has further solidified the decision to maintain the export ban.
Food inflation eased to 1.78% year-on-year in April, down from 2.69% in March and the lowest since October 2021. Though slowing, it remains a key contributor to overall inflation.
Wheat exports were banned in May 2022 after a dip in domestic production and a sharp fall in procurement for the central pool. Since then, limited shipments have continued on humanitarian and diplomatic grounds.
Wheat production is expected to hit a record 115.3 million tonnes in 2024–25, up 2% from 113.3 million tonnes the previous year, according to the agriculture ministry’s second advance estimates.
The government has indicated that the export ban will remain in place to ensure domestic prices remain at a reasonable level especially during the festival time, when there is spurt in demand. “While there is no immediate plan to lift the ban, the situation will be monitored," said the one of the two people mentioned above.
A query sent to the agriculture ministry on Monday went unanswered.
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India’s milling industry has urged the government to allow unrestricted export of wheat products without advance authorization. Wheat exports have been banned since 2022, though imports are allowed under pre-authorization for re-export as flour within 180 days.
The Centre imposed stock restrictions in June 2024, which were later revised in September, aiming to keep wheat accessible and prices stable for consumers. Despite these efforts, wheat prices surged to a record high of over ₹32,000 per tonne in Delhi in November 2024, driven by strong demand and limited supplies. The stock limits remained in force until 31 March 2025, and traders and millers are now required to report their wheat stocks every Friday.
Meanwhile, favourable weather and the absence of natural calamities have underpinned the projected increase in production this year.
“No doubt, the crop is good and procurement has also been significant. We are hoping that our granaries will be full in a few months. Still, we have to consider domestic demand and supply. We don’t want to create a situation of price escalation and, during a crisis in the festival season, be forced to roll back our own decision," said the the other person cited above.
"Prices are stable right now, and any change in policy could break that momentum and lead to unnecessary market uncertainty or a price rise," this person said.
As of Monday, wheat procurement in the ongoing Rabi marketing season (RMS) has reached 29.3 million tonnes, close to the 31.2 million tonnes target. This puts the government in a comfortable position to meet statutory food security obligations and intervene in the market if needed.
Some experts, however, have called for a more nuanced approach.
“The ban on wheat products should be immediately lifted. It should not have been imposed in the first place," said Siraj Hussain, former agriculture secretary. “The ban on wheat export must continue. I don't think we have a surplus."
Before the ban, India exported wheat and wheat products mainly to South Asia, West Asia, and Africa. Top buyers included Bangladesh, Indonesia, the United Arab Emirates, Sri Lanka, Kenya, Djibouti, and Somalia. Nepal, Bhutan, and Gulf nations like Oman and Qatar were key importers of processed wheat products.
Since the restrictions began, many of these countries have diversified sourcing to Russia, Australia, the US, Ukraine, and Argentina.
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India has taken similar steps with rice exports to curb inflation.
It banned broken rice exports in September 2022, white rice in July 2023, and imposed a 20% duty on parboiled rice in August 2023. In October 2024, however, the commerce ministry removed a $490/tonne minimum export price on non-basmati white rice, following the lifting of that export ban in late September.
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