India in talks with Russia to Import Wheat in an Attempt to Reduce Food Inflation

New Delhi(India), 17/08/23: India is in negotiations with Russia to import wheat at a discount to increasing global prices in order to bolster supplies and cut food inflation ahead of state and national elections next year.

Reuters reported that, Russia’s wheat imports will allow India to act more effectively in the market, lowering wheat prices, which fueled inflation to a 15-month high in July.

According to Reuters sources, “The government is exploring the possibility of imports through private trade and government-to-government deals. The decision will be made cautiously.”

In recent years, India has not imported wheat through diplomatic channels. When private traders shipped in 5.3 million metric tonnes of wheat in 2017, the country imported a large amount.

According to two sources with knowledge of the matter, the Indian government’s plan to import Russian wheat is one of the supply-side measures being considered to bring down prices of key commodities such as fuel, cereals, and pulses, as well as an extension of rural schemes to alleviate the impact of inflation on the poor.
According to Reuters, Sanjeev Chopra, the federal food ministry’s most senior civil official, stated last month that there was no proposal to import wheat from Russia.

It is worth noting that India just requires 3 million to 4 million metric tonnes of wheat to make up the difference. However, in order to have a significantly greater impact, India may consider importing 8 million to 9 million tonnes of wheat from Russia.

Since the start of the Ukraine crisis last year, Russia has become India’s second-largest seller of products, owing primarily to New Delhi’s cheap oil purchases.

Due to restricted supplies, wholesale wheat prices in India increased by 10% in two months to a seven-month high in August. Due to reduced output, India banned wheat exports last year, and this year’s crop is likely to be at least 10% lower than the government’s projection.