Centre to take strict action against illegal export of wheat

Commerce and Industry Minister Piyush Goyal said the government will take strict action against exporters who try to shop wheat illegally by submitting backdated documents. The Centre banned wheat exports on May 13 to control domestic prices. Exports who have valid irrevocable letters of credit (LCs) issued on or before May 13 can ship the goods.

He added that the ministry is investigating exporters with authorised documents to verify them. "Strongest action will be taken on any exporter who has tried to game the system. I want that to be very clear".

The Commerce Ministry has tightened the norms for obtaining registration certificates for wheat exports in order to prevent traders from exporting using fraud. Now, exports must submit the message exchange date with foreign banks along with a valid irrevocable letter of credit, issued on or before May 13, to obtain registration of contracts (RC) to ship their consignments.

The Directorate General of Foreign Trade (DGFT) had earlier stated it has received information on fraudulent back-dated LCs submitted by unscrupulous exporters for the issue of RCs.

Goyal told the media that some traders have already tried to cheat by making back-dated applications and putting up LCs. "The government will come down strongly on anybody who has tried to back-date an LC and who has made an application to allow exports based on documents which are irregular in any form."

Many criticised the government's move by noting that it will ruin India's credibility as an exporter. An inter-ministerial committee, comprising officials from food, agriculture, and foreign affairs ministries has been set up to examine requests from neighbouring and friendly countries.

"We are insisting that any country which wants wheat from India should ask the government. Only the requests to serve the local population of the country will be considered," said the union minister. "Our concern is that traders, speculators, and hoarders should not get control over the valuable wheat and charge exorbitant prices from poor and vulnerable nations," he added.