CANBERRA: The Centre on Monday hiked the basic customs duty on wheat by 15 percentage points to 25 per cent to prevent imports from reaching India against the backdrop of depressed international prices.
“In view of the continued fall in international prices of wheat and the anticipated adverse impact of increased imports during the first half of this financial year, basic customs duty on wheat has been increased from 10 per cent to 25 per cent,” said an official statement.
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The duty will be in place till March 31, 2016, to stop cheaper overseas purchases from countries, such as France and Australia. Earlier in August, the Government had imposed a 10 per cent duty after millers in South India started placing orders for Australian wheat.
Around half a million tonnes of wheat is estimated to have been imported during the current fiscal as against 27.6 million tonnes procured by the Food Corporation of India. Wheat from Australia is available for around $260-270/tonne, marginally cheaper than the domestic grain
Flour millersin the South are disappointed at the Government’s latest move to curtail the imports. Millers have been arguing that imports of the high protein Australian wheat was necessary to maintain the quality of wheat products as the unseasonal rains across key growing regions in North and Central India early this year had impacted the quality of the local produce. “With the latest duty hike, the little possibility of using the high protein wheat for blending goes out of window. We are very much disappointed with the duty hike,” said MK Dattaraj, past President of the Karnataka Roller Flour Mills Association. The duty hike would be detrimental to the bakeries and the quick service restaurants that depend on the high protein flour to manufacture their products, he added.
PK Ahammed, President of the Kerala Roller Flour Mills Association, said the industry and the consumers would get impacted by the duty hike. “It won’t be viable to import any more as the prices of Australian wheat are also moving up. With a duty of 25 per cent, the landed cost in Kochi will go up to ₹2,400 a tonne from the earlier ₹2,100. As a result of expensive imports the quality of the wheat products would get affected”.
