Cabinet Shifts Wheat Flour, Maida, Semolina from Restricted to Prohibited to Curb Rising Prices

· Wheat Flour Removed from Value added of Free Export List of Agro Commodity, 2014 Amended

· Only G to G Contracts to be Honoured on Case to Case

After banning wheat exports in May, the government on Saturday, 27 August, 2022 prohibited exports of wheat flour, maida, semolina and wholemeal aata with a view to curb rising prices

Notifying a decision of the union Cabinet, the Directorate General of Foreign Trade (DGFT), however, said that exports of these items would be allowed subject to permission of the government of India in certain cases.

"Export policy of items (wheat or meslin flour, maida, semolina, wholemeal aata, and resultant aata) is amended from free to prohibited," according to the DGFT's notification. Semolina also includes rawa and sirgi.

Past contracts and goods in transit will be stopped at ports. Provisions under the foreign trade policy 2015-20, regarding transitional arrangements under para 1.05 of FTP, will "not" be applicable under this notification.

The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA).

Russia and Ukraine are the major exporters of wheat, accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions, thus increasing the demand for Indian wheat.

As a result, the price of wheat in the domestic market has shown an increase.

In order to ensure food security of the country, the government put a prohibition on export of wheat in May. However, this caused a jump in overseas demand for wheat flour.

Wheat flour exports from India have registered a growth of 200 per cent during April-July 2022 compared to the corresponding period in 2021.

The increased demand for wheat flour overseas led to significant price rise of the commodity in the domestic market.

Earlier, there was a policy not to prohibit or put any restriction on the export of wheat flour and therefore, a partial modification of the policy was required by withdrawing the exemption from ban/restrictions on export in order to ensure food security and put a check on mounting prices of wheat flour in the country, according to that statement.

In 2021-22, India exported wheat flour worth USD 246 million. The exports stood at about USD 128 million during April-June this fiscal.

The all-India average retail price of wheat has risen by over 22 per cent to Rs 31.04 per kg as on August 22, compared to Rs 25.41 per kg in the year-ago period, according to data maintained by the consumer affairs ministry.

The average retail price of wheat flour (atta) has increased by over 17 per cent to Rs 35.17 per kg as against Rs 30.04 earlier, the data showed.

Wheat prices in both wholesale and retail markets have also come under pressure due to a nearly 3 per cent drop in the domestic output to 106.84 million tonnes in the 2021-22 crop year.

Wheat production is estimated to have declined due to a heat wave that resulted in shriveled grains in the northern states of Punjab and Haryana.

Industry body Roller Flour Millers' Federation has raised concerns regarding unavailability of wheat and the rise in prices in the last few days

[DGFT Notification 30/2015-2020 dated 27 August, 2022]

Effect of this Notification: Export Policy of items [Wheat or Meslin Flour (Atta), Maida, Samolina (Rava/Sirgi), Wholemeal atta and resultant atta] under HS Code 1101 is amended from ‘From’ to ‘Prohibited’. The provisions as under Para 1.05 of the Foreign Trade Policy, 2015-2020 regarding transitional arrangement shall not be applicable under this Notification. Export of the above items shall, however, be allowed subject to permission of Government of India in certain cases as at Para 2 above.

Subject: - Amendment in Export Policy of items under HS Code 1101.

Whereas there is a sudden spike in the global prices of Wheat or Meslin Flour (Atta). Maida, Samolina (Rava / Sirgi). Wholemeal atta and resultant atta arising out of many factors, as a result of which the food security of India, neighbouring countries and other vulnerable countries is as risk.

Whereas, the Government of India is committed to providing for the food security requirements of India, neighbouring and other vulnerable developing countries Which are adversely affected by the sudden changes in the global market for Wheat or Meslin Flour (Atta), Maida, Samolina (Rava/Sirgi), Wholemeal atta and resultant atta and are unable to access adequate wheat supplies;

Therefore, in order to manage the overall food security of the country and to support the needs of the neighbouring and other vulnerable countries, the Central Government, in exercise of powers conferred by Section 3 read with section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992), as amended , read with Para 1.02 and 2.01 of the Foreign Trade Policy, 2015-20, hereby amends export policy of items under S.No.64 of Chapter 11 under HS code 1101 of ITC (HS), Schedule - II, 2018 as under:

S.No.	ITC HS Codes	Description	Existing Export Policy	Revised Export Policy
64	1101	Wheat or Meslin Flour (Atta), Maida, Samolina (Rava/Sirgi), Wholemeal atta and resultant atta	Free. However, export of all items is subject to recommendation of Interministerial Committee (IMC) constituted for allowing export of wheat. Export of all the shiments approved by IMC shall be allowed subject to issuance of Quality Certificate by Export Inspection Council (EIC) or its FIAs at Delhi, Mumbai, Chennai and Kolkata.	Prohibited

2. The provision as under Para 1.05 of the Foreign Trade Policy, 2015-2020 regarding transitional arrangement shall not to be applicable under this notification. The export of above items. However, shall be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their Government.