Dgft Issues Condition For Export Of Wheat

The DGFT vide Trade Notice No. 06/2022-23 dated May 14, 2022, has issued certain conditions with respect to the export of wheat, for implementation of Notification No. 06/2015-2020 dated May 13, 2022, which prohibited the export of wheat under the Foreign Trade Policy, 2015-2020 (“FTP”). To ensure food security in the country, the government has announced prohibitions on wheat exports. However, under special conditions, the export of wheat items will be allowed. The present article briefs the Condition for the export of wheat.

The Gist of DGFT Trade Notice

India has banned wheat exports with immediate effect as part of measures to control rising domestic prices, according to a DGFT Notification No. 06/2015-2020 dated May 13, 2022

DGFT also announced that the export shipments for which irrevocable letters of credit (LoC) have been issued on or before the date of this notification will be allowed
The export policy of wheat is changed to prohibited from Free earlier with immediate effect
DGFT also clarified that wheat exports would 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 governments.

Amendment in Export Policy of Wheat - Notification No.06/2015-2020 dated May 13, 2022

As per the Notification No.06/2015-2020 dated May 13, 2022, DGFT has amended the Export Policy of Wheat under S.No.59 of Chapter 10 of Schedule – 2 of the ITC (HS) and placed their exports in the Prohibited category from Free earlier’ with immediate effect. Export of all wheat, including high-protein durum and normal soft bread varieties; has been moved from "free" to the "prohibited" category with effect from May 13, 2022

Conditions for Export of Wheat

DGFT also notified that the export of wheat shall be allowed under the following two conditions:

As a transitional arrangement, the export will be allowed in case of shipments where an Irrevocable Letter of Credit (ICLC) has been issued on or before the date of this Notification, subject to submission of documentary evidence as prescribed
The export will also 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 governments.

Importance Announcement for RAs

The directorate general of foreign trade has directed its regional authorities to issue registration of contracts to the wheat exporters who have irrevocable letters of credit to honor their contracts. The direction came after the government banned wheat exports but allowed the overseas shipments for which irrevocable LoC (Letters of Credit) have been issued on or before May 13. All RA (Regional Authorities) under the DGFT are hereby directed to issue Registration of Contracts (RC) to the exporters of wheat, preferably within a prescribed time limit of 24 hours, on submission of application, complete in all respects, by the exporters

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Frequently Asked Questions

Common questions about DGFT Wheat Export Prohibition and Conditions India 2022.

The primary reason for prohibiting wheat exports is to ensure food security and control rising domestic prices of wheat within the country. The government has taken this measure as part of its efforts to manage the domestic supply and availability of wheat.

Yes, there are two exceptions mentioned in the notification. First, export shipments for which irrevocable letters of credit (LoC) have been issued on or before the date of the notification will be allowed. Second, wheat exports will be permitted based on permission granted by the Indian government to other countries to meet their food security needs and upon requests from their governments.

Exporters who have already obtained irrevocable letters of credit (LoC) for wheat exports on or before May 13, 2022, can submit documentary evidence of the same to the concerned Regional Authorities (RAs) under the Directorate General of Foreign Trade (DGFT). The RAs have been directed to issue Registration of Contracts (RC) to such exporters, preferably within 24 hours of receiving complete applications.

The export policy for wheat has been amended from "Free" to "Prohibited" under the Indian Trade Classification (Harmonized System) [ITC (HS)] with immediate effect. This change applies to all varieties of wheat, including high-protein durum and normal soft bread varieties.

The trade notice issued by the DGFT provides clarification and conditions for implementing the notification that prohibited wheat exports. It outlines the exceptions and procedures to be followed by exporters, ensuring a smooth transition and adherence to the new export policy.

By prohibiting wheat exports, the Indian government aims to maintain sufficient domestic supply and prevent potential shortages or price escalations in the domestic market. This measure is intended to safeguard food security within the country and ensure the availability of wheat for the domestic population.

The Regional Authorities (RAs) under the DGFT have been directed to issue Registration of Contracts (RC) to wheat exporters who have irrevocable letters of credit (LoC) issued on or before May 13, 2022. They are expected to process these applications and issue the necessary registrations within a prescribed time limit of 24 hours, subject to the submission of complete documentation by the exporters.

Yes, the prohibition applies to the export of all types of wheat, including high-protein durum and normal soft bread varieties. The notification covers the entire category of wheat exports under the relevant product classification.

Irrevocable letters of credit (LoC) are considered a transitional arrangement for allowing wheat exports. Exporters who have obtained irrevocable LoCs on or before the date of the notification (May 13, 2022) can still export wheat by providing documentary evidence of the same to the concerned authorities.

The prohibition on wheat exports is a measure taken by the Indian government to prioritize domestic food security and ensure the availability of sufficient wheat supplies within the country. By restricting exports, the government aims to maintain price stability and prevent potential shortages or price escalations in the domestic market, thereby safeguarding the food security needs of the Indian population.