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Govt. orders stricter checks on wheat export process- Mrit News

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Latest order from DGFT directs Regional Authorities to ‘physically verify’ all documents

Latest order from DGFT directs Regional Authorities to ‘physically verify’ all documents

The government has imposed a stricter process of physical verification of all Letters of Credit to ensure full compliance of its May 13 order that restricts wheat exports. The latest order from the Directorate General of Foreign Trade (DGFT) directs the Regional Authorities to “physically verify” all documents regarding export of wheat before being issued Registration Certificates.

In the May 13 order, the Ministry of Commerce and Trade had “prohibited” export of wheat but permitted exports in cases when the Letters of Credit were issued “on or prior to” that date. It was feared that unscrupulous elements would forge Letters of Credit to show validity of the Letters of Credit and continue to export wheat.

“In cases where the LC date is on or prior to 13th May 2022, but the SWIFT message/message exchange date between the Indian and Foreign bank is after 13th May 2022, Regional Authorities may conduct full investigation and if these are found to be ante-dated, immediate proceedings under FT (D&R) Act, 1992 to be initiated against the exporters,” the order from the DGFT said. The cases wherever necessary would also be investigated by the Economic Offence Wing (EOW) and the CBI.

“In case of complicity of any Banker in cases where ante-dating is established, necessary proceedings as per law will be initiated,” the notification stated.

Supply to U.S.

The order regarding stricter enforcement of the May 13 order came days after the USDA (US Department of Agriculture) cut Indian wheat supply for the 2022-’23 period to 99 million metric tonnes (MMT). The U.S. agriculture assessment declared that wheat production in India will be at least 10-15% lower because of “heat stress” during March. The American survey hints that India may fall short of wheat supplies for its domestic consumption. A more conservative estimate by the traders has pegged the Indian wheat production at 95 million metric tonnes, indicating growing stress on the Indian agriculture sector.

The USDA also observed that the Government of India has reduced the wheat component in the “subsidised distribution system” hinting that the government adjusting to the shortfall of wheat at home. The report said that Uttar Pradesh had been moderately affected by the heat wave of March but overall the production had been affected as the heatwave shrivelled wheat.

Despite the forecast of shortfall, the May 13 order said that India would export to “vulnerable” countries that required wheat. Bangladesh, India’s largest wheat export recipient, is expected to receive large shipments this year too.


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