India, which had imposed a ban wheat exports since the past two and a half years, has granted Nepal permission to import 200,000 tonnes of wheat. Government officials have expressed optimism that this move will help meet the industrial demand for wheat in Nepal.
According to a notice issued on Saturday by India’s Directorate General of Foreign Trade, the wheat export to Nepal will be carried out through the National Cooperative Limited (NCEL). India initially imposed a complete ban on wheat exports in late April 2022, citing rising wheat prices and food security concerns, particularly following the Russia-Ukraine conflict, which disrupted global supply chains.
Nepal's flour, noodle, and biscuit industries have struggled to source wheat due to the export restrictions. Some companies resorted to reducing product sizes instead of raising prices, a practice known as "shrinkflation." In response to these challenges, the Ministry of Industry, Commerce, and Supplies initiated efforts last November to secure wheat imports from India, with the approval finally granted three months later.
Nepal’s Ambassador to India, Dr. Shankar Prasad Sharma, announced the development on the social networking site X, stating: “At our request, the Indian government has permitted the import of 200,000 tons of wheat through NCEL, despite an ongoing export ban.”
Despite the approval, industrialists of Nepal argue that 200,000 tonnes of wheat will be insufficient to meet the raw material requirements of industries. Dilip Kumar Shrestha, treasurer of the Nepal Biscuit Manufacturers Association, said many biscuit factories are operating at reduced capacity, with some even shutting down due to the scarcity of wheat.
"The price of biscuits has increased, and some industries have closed. The government must push India to fully lift the export ban to meet industry demands," Shrestha said.
However, Baburam Adhikari, spokesperson for the Ministry of Industry, Commerce, and Supplies, dismissed these concerns, stating that the allocated 200,000 tonnes will adequately meet industrial needs. He noted that industrialists imported only 150,000 tonnes of wheat last year, even though the government had approved over 300,000 tonnes.
According to the Ministry of Agriculture and Livestock Development, Nepal produces 2.1 million tonnes of wheat annually on approximately 700,000 hectares of land. While this is sufficient for household consumption, it falls short for industrial purposes, necessitating imports from India and other countries, including Mexico, China, Japan, and Thailand.
Globally, India ranks as the eighth-largest wheat exporter, behind Russia, the European Union, Australia, the United States, Ukraine, Argentina, and Canada.
