India has lifted its four-year wheat export ban, permitting 2.5 million metric tons to be shipped, yet competitive pricing challenges and limited viable markets threaten to severely restrict actual export volumes.

India Reopens Wheat Exports After Nearly Four Years

India's government announced in mid-February that it would allow exports of 2.5 million metric tons of wheat, ending a ban that had been in place since May 2022. This decision came as India accumulated higher grain stocks, domestic prices softened, and the country anticipated record wheat harvests for the 2025-26 growing season. The government also permitted exports of 500,000 metric tons of wheat products including atta, maida, and suji. According to government statements, the decision aimed to stabilize domestic prices, improve market liquidity, and strengthen farmers' incomes while maintaining national food security. India is the world's second-largest wheat producer after China and had targeted production of 119 million metric tons for the current season, building on a record harvest of 117.9 million metric tons the previous year.

Price Competition Poses Major Challenge to Export Viability

Despite lifting the ban, India faces a significant hurdle in making wheat exports commercially viable: domestic prices remain substantially higher than global market rates. Indian wheat currently trades at approximately 2,500-2,600 rupees per quintal domestically, which translates to prices well above international benchmarks when freight costs are factored in. In comparison, major international grain traders were offering wheat for March delivery at $286 to $290 per ton, creating a competitive gap that makes Indian wheat unattractive in overseas markets. Additionally, Indian farmers are reluctant to sell below the government's minimum support price, further limiting the quantity available for export at competitive international rates.

Indian wheat is not competitive, and ports like Kandla and Visakhapatnam face unviable price gaps of over $45 per ton compared to global wheat prices.

Limited Export Destinations Restrict Market Opportunities

While the government has authorized 2.5 million metric tons for export, trade analysts expect that actual shipments will fall dramatically short of this target. Most industry observers believe India can realistically export a maximum of 1 million tons, with Bangladesh emerging as the only truly viable destination due to proximity and existing trade routes. Land and rail routes to Bangladesh offer the most economically feasible pathway, whereas maritime exports through major ports would require prices that undercut current global rates by significant margins, making them commercially unviable. Recent political developments in Bangladesh have also created potential opportunities for government-to-government export arrangements, which could provide a more stable demand channel than commercial market forces alone. However, even these favorable circumstances are unlikely to approach the quantities that the government has authorized for shipment.

Industry Perspective and Long-Term Market Positioning

The flour milling industry had actively lobbied the government to relax export restrictions, citing the need to reclaim traditional international markets where Indian wheat products are valued for quality and authentic flavor. During India's export ban, competitors from Pakistan, Nepal, and Bangladesh filled the void, while some Indian companies established processing units in the Middle East and Canada to serve diaspora communities. The industry views the export permission as an opportunity to reestablish India's position in global markets and restore supply chains that had been disrupted over nearly four years. However, without addressing the fundamental cost competitiveness issue, this market recovery will likely remain constrained to niche segments and neighboring countries rather than achieving the broader export expansion that many in the agricultural sector had hoped for when the ban was lifted.

India's decision to permit wheat exports represents a recognition of improved domestic supply conditions and the need to support farmer incomes during peak harvest season. However, the substantial gap between domestic and global wheat prices, combined with geopolitical constraints and limited viable markets, suggests that actual export volumes will remain well below authorized levels. The coming months will reveal whether Bangladesh proves sufficient as an export destination or whether the government considers additional measures to improve price competitiveness and expand viable trading partners.

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