In a significant move aimed at addressing food security needs and streamlining trade, the Indian government has approved the export of 2 lakh tonnes of wheat to Nepal. This decision, which comes despite a general restriction on wheat exports to safeguard domestic supplies, will be facilitated through the National Cooperative Exports Limited (NCEL). The export is a special exemption to the ongoing ban and reflects India's commitment to meeting the food security needs of neighbouring countries.

The announcement, made through a recent notification from the Directorate General of Foreign Trade (DGFT), underscores India's role as a regional partner, ensuring that Nepal’s demand for wheat is met amid global supply challenges. The export, which will be conducted through NCEL, is part of the government’s broader strategy to foster cooperative-driven trade while responding to requests from countries facing food shortages.

India, in its pursuit to balance local agricultural production with international demands, imposed a ban on wheat exports in May 2022 to prevent further price hikes in the domestic market. However, the government has been granting specific exemptions for countries with pressing food security needs. In this case, Nepal, which shares close cultural and economic ties with India, has been allowed to import wheat under a special provision. The government’s decision reflects the delicate balancing act of ensuring sufficient domestic supply while fulfilling international commitments.

In addition to the wheat export approval, the DGFT has announced a significant easing of import restrictions concerning synthetic knitted fabrics. The government has exempted holders of advance authorization, export-oriented units (EOUs), and special economic zones (SEZs) from the $3.5 per kilogram minimum import price (MIP) requirement for synthetic knitted fabrics. This exemption is a crucial step towards facilitating the smooth import of high-quality fabric, particularly for businesses involved in the textile and garment sectors.

The $3.5 per kg MIP was originally imposed to curb the influx of low-quality synthetic fabrics and protect the domestic textile industry. Under the new ruling, synthetic knitted fabric imports will not be subject to the MIP condition for companies operating under the specified schemes. This includes those in SEZs, EOUs, and those with advance authorization, thus encouraging the import of necessary inputs for manufacturing processes that cater to both the domestic and export markets.

The government’s move is seen as an effort to support India’s manufacturing sector, particularly in textiles, by easing some of the import restrictions that had hampered production. By allowing these exemptions, the Indian government aims to foster a more dynamic and competitive industry, which in turn could boost exports and create more job opportunities in the textile and garment sectors.

These recent regulatory changes demonstrate India’s flexibility in trade policies, as the country navigates its internal economic challenges while fulfilling its regional and global obligations. Both the wheat export to Nepal and the easing of import restrictions for synthetic fabrics signal India’s proactive approach to managing domestic needs and international trade relations effectively.