The Indian Government on Tuesday March 28th, 2017 announced an introduction of 10% import duty on wheat and pulses. It had earlier abolished these duties four months back. In these four months, import of these commodities increased substantially causing dollar outflows.
This move is also being seen as a protectionist move to protect local growers as the harvest season starts.
India, which is the globally the second largest wheat producer, had lowered the import tax on wheat to 10% from 25% in September 2016 and scrapped the duty on 8 December 2016.
The scrapping of import duty had encouraged local traders to buy more than 5 million tonnes of wheat since mid-2016 to meet a supply shortfall left by two years of drought.
For users who are surprised by this sudden move, you can explore other non-Indian wheat importers.
