India resumes wheat exports after four years; high prices may cap global demand

India has resumed wheat exports after a gap of four years, with traders beginning small shipments to buyers in Asia and the Middle East, following improved domestic supplies and a policy easing by the government.

According to trade sources, ITC Limited has initiated the first shipment, loading around 22,000 metric tonnes of wheat at Kandla port for export to the United Arab Emirates. The move marks India’s return to global wheat markets after a ban imposed in 2022 to control domestic prices and ensure food security.

India, the world’s second-largest wheat producer after China, had extended export restrictions through 2023 and 2024 following heatwave-induced crop damage and declining reserves. However, a strong harvest last year has helped rebuild stockpiles, allowing New Delhi to cautiously reopen exports.

The government has so far permitted traders to export up to 5 million tonnes of wheat in phases, signaling a calibrated approach to re-entering international markets.

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Despite the policy shift, India’s export prospects remain constrained. Domestic wheat prices have risen due to recent crop damage, making Indian supplies costlier than competitors from Australia and the Black Sea region. Trade estimates suggest Indian wheat is at least $20 per tonne more expensive in global markets.

Still, disruptions in West Asia and rising freight costs have created a temporary window for Indian exporters. Buyers facing immediate supply shortages are turning to India for quick shipments, particularly those requiring deliveries within 30 to 45 days.

The initial export deal to the UAE was reportedly signed at around $275 per tonne on a free-on-board basis. However, analysts believe large-scale export momentum is unlikely unless Indian prices become more competitive.

Going forward, India’s wheat exports are expected to remain opportunistic rather than structural, driven largely by short-term demand gaps rather than sustained global competitiveness.