Government says 10% basic custom duty on wheat to stay till March 2016

The government has decided to impose basic custom duty of 10 per cent on wheat reinstating tariffs after a gap of eight years following big overseas purchases in recent months.

The import duty will be applicable on all imports of wheat into the country till 31 March 2016, finance minister Arun Jaitley informed the Lok Sabha today. He said the government expects revenue gain of an estimated Rs90 crore from the impost in the remaining part of the financial year.

The decision to impose import duty on wheat follows import of large quantities of Australian wheat by millers in South India.

The government wants to curb grain imports into the country at a time at a time when state granaries are overflowing with domestic stocks thanks to seven years of bumper harvests.

In June private firms signed deals to import 500,000 tonnes of premium Australian wheat, the biggest such purchases in more than a decade.

Millers contracted to buy foreign wheat after rain and hailstorms earlier this year damaged crops, especially high-protein varieties used to make pasta and pizzas.

The duty impost is now expected to halt import of another 500,000 tonnes that millers had planned to import.

Meanwhile, reports quoting trade sources in New Delhi said the government was forced to move quickly on fears that some of the 52,500 tonnes of French wheat rejected by Bangladesh over quality concerns may find its way into India.

The trader was also quoted as saying that at least one of the rejected cargoes was heading towards Tuticorin port in southern India.