On May 13, the government banned wheat exports to control domestic prices
The government will take strict action against exporters who are trying to ship or have shipped wheat by submitting back-dated and improper documents following the ban on exports of the crop, Commerce and Industry Minister Piyush Goyal said on Friday.
On May 13, the government banned wheat exports to control domestic prices. However, it allowed shipments for exporters who have valid irrevocable letters of credit (LCs) issued on or before May 13.
The commerce ministry has tightened the norms for obtaining registration certificates for wheat exports with a view to curbing fraudulent practices such as submission of improper documents by traders.
Exporters have to 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.
"Some people have even 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; who has made an application to allow exports based on documents which are irregular in any form," Goyal told reporters here.
He added that the ministry is investigating exporters who have received authorisation to verify if they have filed all the proper documents.
"... strongest action will be taken on any exporter who has tried to game the system or who has tried to create back-dated LCs, back-dated applications. I want that message to be very clear," he added.
The Directorate General of Foreign Trade (DGFT) has earlier stated that it has received information from sources that fraudulent back-dated LCs, showing date of issuance prior to May 13, 2022, are being submitted by some unscrupulous exporters for issue of RCs.
The minister further said an inter-ministerial committee, comprising officials from food, agriculture and foreign affairs ministries, has been set up to examine requests for wheat from neighbouring and friendly countries.
The committee will ensure that the wheat sought by those nations are for their own requirements.
"So whichever foreign government will apply, the committee will examine it. We are insisting that any country which wants wheat from us should ask only for their local population and commit that they will not allow it to be exported," Goyal said.
"Our concern is that traders, speculators, and hoarders should not get control over the valuable wheat and charge exorbitant price from poor and vulnerable nations. We want to support to the extent that we can," he added.
The commerce minister also said the issue of selling to a WTO (World Trade Organisation) member country from public stock holding will come up for discussion at the ministerial conference (MC) this month in Geneva.
"We have some stocks, we have asked the WTO to allow the relaxations so that whenever a country is in need of support on government to government basis, we can supply to them. It will be a matter of discussion when I will go to WTO at 12th MC," he said.
On the wheat export ban decision, he said it was important for the country's food security and to ensure that inflation does not raise its head on account of wheat.
"Farmers have already sold their produce which was evident from the fact that after the ban was introduced, we opened procurement again, and we only got 6 lakh tonnes," he pointed out.
He added that the ban decision was important as indiscriminate shipments beyond a point could "have been harmful for our own food security and prices could have skyrocketed."
Prices have already fallen by Rs 5 a kg in the public markets and "we are saved from a catastrophic disaster that could have happened", Goyal added.