Govt may ease import norms

The government may be looking at further relaxing its wheat import norms to get cheaper rates.

Officials have held talks with global players earlier this week on the problems they face in selling wheat to India and the reasons they add a hefty risk premium to their bids.

Companies selling wheat to India factor in a premium of about $10-15 a tonne in their bids to cover for risks.

An official with a multinational trading house said India is among select countries that seek a phytosanitary clearance at both the destination as well as the load port.

"If a shipment is rejected at the destination port after obtaining adequate clearance from the load port, it gets very difficult to cover the cost of finding buyers in other countries and then diverting the cargo," he said.

The official, who attended government's meeting with traders, said the sellers have asked government to expedite pending demurrage claims.

The STC is yet to settle its outstanding payments to firms that took part in India's wheat tenders last year. Last year, companies had run up demurrage bills totalling about $12-14 million due to congestion at Kandla and Mundra ports in October-November.

"Any profits made on the wheat deals last year were more-or-less wiped out due to high demurrage costs, which we have not received so far," the trading house official said.

He said the sellers have also asked for easier fumigation norms. The country's wheat import tenders specify a 21-day exposure to aluminium phosphate as against the prevalent norm of 7-14 days.

Another industry official, who attended the meeting, said government has assured it will try address their problems in the next tender, but maintained scepticism on the steps that will be taken in the wake of quality concerns raised in the country from various quarters.

A senior government official was non-committal on the action the government might initiate to ease imports. "We just wanted to know why exporters are finding it difficult to sell wheat to India," he said when asked about the agenda of the meeting with sellers.

Even last year, the government had to relax its stringent import norms to bring them in line with the globally accepted CODEX norms to seek wider participation in the wheat tenders.