India to import 2 mln tons of duty-free wheat

The Indian government has allowed import of an additional 2 million tons of wheat at zero customs duty as part of measures to meet the shortfall in procurement of the commodity for Public Distribution System (PDS), Press Trust of India reported Saturday.

The imports will be made by state-run Food Corporation of India (FCI) by February 28, 2007. The imports will be allowed only through Chennai, Tuticorin, Cochin and Vishakhapatanam ports, the Directorate General of Foreign Trade (DGFT) said in a notice.

DGFT said the public notice is being issued in accordance with the special order issued by Indian Finance Ministry on Aug. 14 for exemption of customs duty on import of wheat.

These 2 million tons of wheat is in addition to the 3.83 million tons of the commodity that public sector company, State Trading Corporation, is importing at zero-duty. State-owned firms MMTC Ltd and PEC Ltd are also importing 40,000 tons of wheat each for private traders at 5 percent customs duty.

Wheat is being imported to check prices and meet the projected shortfall in procurement by FCI for the Public Distribution System. The Indian government had targeted to procure about 16 million tons of wheat from farmers by July 1 this year to maintain buffer stock for PDS, but has managed to buy only 9.2 million tons so far.

The Indian government had in February this year allowed wheat imports after a six-year gap. Since February, State Trading Corporation (STC) has floated four tenders for import of 3.9 million tons of wheat. Of this, 3.83 million tons wheat has been contracted from global suppliers such as Swiss firm Agrico Trade and Australia's AWB.

Source: Xinhua