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25-May2018

Government raises custom duty on wheat to 30%

In order to protect domestic growers from cheap imports, the government has raised the customs duty on wheat to 30% from 20% earlier. The increase in import duty on wheat comes in the wake of record domestic production and fear of cheaper imports from international market, especially from Russia where the production is expected to be better this year. As per the Central Board of Excise and Customs' (CBEC) notification, the import duty on walnut shell has also been increased to 100% from 30% earlier.

The government wants to restrict overseas purchase so that domestic prices of wheat do not come under pressure and farmers get at least the minimum support price (MSP) of Rs 1,735 per quintal fixed for the 2017-18 crop year (July-June). Besides, farmers have almost harvested the 2017-18 wheat crop and the government has procured about 33.3 million tonnes (MT) so far at the support price.

The government, which has procured huge quantity of wheat this crop year, is looking at disposing of the stock to bulk consumers like flour millers at a price of Rs 1,900 per quintal at ex-Ludhiana price. If customs duty was not raised, the government's open sale of wheat could be affected. The government's third advance estimate has pegged wheat output at a record 98.61 MT for the 2017-18 crop year, while the country imported 1.48 MT of wheat during 2017-18 fiscal.


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