Impact of Geo politics on Indian Wheat Exports

Wheat is one of the major staple foods of the world. It is milled and used as flour in kitchens, preparing baked food items such as bread and biscuits. India is the second-largest producer of wheat in the world next to China followed by Russia. Russia and Ukraine alone account for 30% of world wheat exports and their destinations include Africa and the middle east.

The ongoing Russian invasion of Ukraine has led to a global wheat shortage and the countries such as Egypt and other African countries mainly betting on Russia and Ukraine for their wheat are in trouble. During these times India has entered the scene to plug the global wheat shortage and to emerge as the new wheat exports market to the world. Indian prime minister has announced that India has the power to feed the world if WTO grants permission to increase wheat exports. This move by India has attracted many countries looking for a reliable exporter to plug the vacuum and many countries such as Egypt and turkey placed orders for wheat. Moreover, Egyptian delegations visited Indian wheat farms to assess the quality and place procurement orders.

India has forecasted wheat production of 113.2 million MT for 2021-22 but it cut the forecast to 105 million Mt. The cut down in forecast is majorly due to the unprecedented heat wave that hit India and Pakistan in the month of May, low procurement made by Food corporation of India (FCI) when compared with that of the previous year, to meet the food grains required for Pradhan Mantri Garib Kalyan Anna Yojana scheme that started during the covid time, and soaring domestic wheat prices.

Taking into consideration all these factors India has announced a wheat export ban with effect from May 13. However, the Director-General of Foreign Trade (DGFT) has given clarity that this is not a blanket ban and said that government is ready to supply wheat to the needy nations if their counterparts come in touch with the Indian government. This move by the Indian government has led to skyrocketing wheat prices worldwide and many countries openly criticized India for the wheat ban moving a step forward G-7 countries stated that this move by India will lead to the worst food crisis among poor nations. However, on the other hand domestic wheat prices have cooled down.

Rejection of India wheat shipment by Turkey

In the month of May India’s leading player, ITC has exported 56,000 tons of wheat to buyers based in the Netherland on a FOB (Free on Board) basis by adhering to all sanitary and phytosanitary measures (SPS) of importing country. This buyer, in turn, sold the wheat to turkey, and later on, reaching the port the shipment carrying Indian wheat is rejected at the port of entry by Turkish authorities citing the reason that wheat contains Indian Rubella disease, and the shipment is sent back to Kandla port.

We are aware that the Netherlands follows stringent SPS measures which are beyond the Codex Alimentarius Commission levels. The wheat shipment when exported has met all the standards of importing country. However, Turkey rejected the shipment by citing the reason presence of Indian Rubella disease. Many experts believe that this move by turkey is mostly based on geopolitical grounds. It is open fact that turkey is against the move of scrapping article 370 that removed the special status of Jammu and Kashmir, Many times turkey used international platforms to raise the issue of Jammu and Kashmir.

Some of the experts say this rejection might be due to phytosanitary issues as turkey is facing 70% inflation and is in dire need of wheat currently. Moreover, the Indian counterpart is looking into the issue and requested the turkey authorities to provide evidence for rejection but still today India has not received any relevant documents related to rejection. Such type move by turkey has pushed many countries that are importing wheat from India into a dilemma and it will largely impact the exporters.

To conclude, whatever may be the reasons behind wheat rejections India should adhere to meet stringent phytosanitary measures placed by importing countries. Thus, leaving the image of a reliable trade partner with other nations. To emerge as a global soft power and to meet the target of doubling farmers' income India should improve the quality of its exports in the global market.