India has increased the basic customs duty on import of wheat by 10 percentage points for the second successive year to protect the domestic industry in the wake of expected record production of the grain this year.
The Central Board of Indirect Taxes and Customs through a notification recently raised the basic customs duty on wheat to 40 percent.
In May last year, the Indian government brought into effect a 10 percentage-point hike in the customs duty on wheat to 30 percent.
The government wants to restrict overseas purchase so that prices of wheat in the domestic market do not come under pressure as India’s wheat output this season is likely to cross 100 million tonnes, an all-time high.
The output stood at record 99.70 million tonnes in the 2017-18 crop year (July-June).
The government has fixed the minimum support price or the price at which it buys wheat from farmers at Rs 1,840 per quintal, up from Rs 1,735 a year earlier, as part of its decision to fix the support price at a minimum of 1.5 times the production cost.