India DGFT permits 50 LMT wheat exports under two-tranche quota while prohibition remains in force

Mechanism

India's wheat export regime has operated under DGFT Notification 06/2015-2020 (13 May 2022) — a blanket export prohibition issued following the March-April 2022 heatwave-driven production shortfall, the Russia-Ukraine wheat-flow disruption, and rising domestic CPI pressure. The 2022 ban classified wheat under HS Codes 10011900 and 10019910 as "Prohibited" with two narrow exemptions: pre-existing Irrevocable Letters of Credit and discretionary G2G exports.

Notification 62/2025-26 (24 February 2026) is the first material relaxation in nearly four years. The drafting choice is structurally significant: rather than reverting wheat to "Free" (as DGFT did with non-basmati white rice in September 2024), the headline policy classification remains "Prohibited" and the relaxation operates as a discretionary 25 LMT carve-out via authorised quantity. This preserves the DGFT's option to retighten without a fresh prohibition notification if domestic CPI or the 2026 Kharif monsoon outlook deteriorates.

The April 2026 second-tranche notification (13/2026-27) doubled the cumulative envelope to 50 LMT (5 MMT). Public Notice 05/2026-27 (30 April 2026) prescribes the second-tranche allocation modalities:

• 18 LMT for large exporters
• 5 LMT for state trading entities and cooperatives
• 2 LMT for MSMEs

Online applications via the DGFT IEC-holder portal opened 1 May through 10 May 2026, with authorisations valid for six months and case-by-case extensions possible.

Policy logic vs. the 2023 rice ban

This action sits on the food-security-export-controls theme axis, parallel to the still-in-force 2023-07-20 India non-basmati white rice export ban. Both instruments operate under DGFT's Section 3 foreign-trade authority and target staple-food CPI stabilisation rather than upstream value-add capture.

The structural shift here — from prohibition to calibrated quota-relaxation — is a partial unwind, not a full repeal. India remains a top-five global wheat producer (and the world's #2 after China); a 5 MMT cumulative export envelope is meaningful for global wheat trade balance, MENA / Sub-Saharan Africa import flows, and potential displacement of Russia-Ukraine wheat supply.

Severity rationale

Severity 3 reflects:

• Quantitative scale: 5 MMT cumulative quota is roughly 2-3% of

global wheat trade — material but not market-resetting.

• Structural significance: precedent for partial unwinding of

staple-food export bans; preserves prohibition baseline as a policy-retightening option.

• Transmission channel: global wheat reference prices and

MENA/Egypt/Türkiye import-cost dynamics; Russia-Ukraine wheat-flow displacement second-order effects.

Not severity 4 because (i) the prohibition remains in force at the headline level and the policy is reversible without a new notification, (ii) the volume is modest relative to India's pre-2022 wheat-export peaks (~7 MMT FY 2021-22), and (iii) the framing is supply-management relaxation rather than full liberalisation.

Downstream implications

• Modest downward pressure on global wheat reference prices (Chicago

wheat, Black Sea FOB benchmarks) from May-October 2026 export window.

• Demand-side relief for MENA importers (Egypt, Türkiye, Bangladesh,

UAE) historically dependent on Indian wheat in the pre-2022 period.

• Partial Russia-Ukraine wheat-flow displacement: Indian wheat

competing in markets where Russia consolidated share post-2022.

• DGFT retains tightening optionality: if 2026 Kharif monsoon

underperforms or CPI re-accelerates, the prohibition baseline can be enforced without a new notification.

• Precedent for partial quota-relaxation under retained prohibition

classification — this drafting pattern may inform any future unwinding of the still-in-force 2023 non-basmati white rice ban.

Open questions

• Whether the 2026 Kharif monsoon (June-September) and the

October-November buffer-stock procurement cycle drive a third tranche or a re-tightening.

• Whether any of the 50 LMT envelope flows preferentially to G2G

destinations (Bangladesh, UAE, Gulf states) versus open commercial tenders.

• Whether the structurally parallel 2023 non-basmati white rice

partial-relaxation (MEP-then-free, September-October 2024) provides a template for any future move from "Prohibited + quota" to "Free + MEP" on wheat.

• The full text of DGFT Notification 62/2025-26 and 13/2026-27 should

be retrievable via the DGFT canonical notifications portal once the numbered-notification pages cycle into the static archive.