Union Commerce, Industry and Food Minister Piyush Goyal on Friday said the government will take strict action against exporters who had created fake, back-dated letters of credit (LCs) on May 13 to ban wheat exports.

“We are examining all possibilities of any exporter who has tried to sabotage the system,” he said. While barring wheat exports last month to control rising domestic prices, the government had made it clear that shipments backed by LCs issued before the ban was announced would be allowed.

Goyal said an inter-ministerial committee comprising finance, food, agriculture and road transport ministers is currently examining whether to allow export of wheat on a government-to-government (G2G) basis. Sources said that many countries like Bangladesh, Indonesia, UAE, South Korea, Oman and Yemen have approached India for wheat import under bilateral arrangement between governments.

Wheat export restriction is not applicable to two types of shipments – exports made by the Government of India under bilateral understanding with certain countries and shipments under transitional arrangements and shipments under transitional arrangements, where irrevocable LCs have been issued prior to the ban.

“We will meet the food security needs of less developed countries by allowing export of wheat on a case-by-case basis,” Goyal said in an interaction with select media persons.

Earlier in the week, the Directorate General of Foreign Trade (DGFT) had warned wheat exporters that it would probe cases with reference to the Central Bureau of Investigation (CBI) and the Economic Offenses Wing (EOW) if they are found to be used back. -Dated LC for illegally obtaining permit for outbound shipment of grain.

FE had recently reported that exporters had submitted LCs for obtaining permits for dispatch of more than one million tonnes (MT) of wheat, which was much higher than the initial trade estimate of around 0.4 MT, leading to a glut by unscrupulous elements. Attempts to abuse the LC route have been suspected. ,

According to trade sources, more than one metric ton of wheat is still lying at Kandla port in Gujarat for export as DGFT is currently checking all the LCs.

On reports of Turkey rejecting Indian wheat consignment, Goyal said the consignment was found to have been exported. ITC Limited to the Netherlands which was diverted to Turkey without the knowledge of the company. “India’s wheat is of good quality and the country which has rejected it has never traded this product with India,” he said.

As wheat production declined after the heat wave conditions in March, the government had to curb exports to improve domestic supply. The Agriculture Ministry revised the wheat production for the crop year 2021-22 (July-June) to 106 MT from February’s estimate of 111 MT.

India exported 7 metric tonnes of wheat valued at $2 billion in FY 2012, while only 2.1 metric tonnes in FY 2011 was valued at $0.55 billion.

After the export restrictions were imposed, the Food Corporation of India again tried to procure wheat and could only get 0.6 metric tonnes, so the farmers had already sold their produce. FCI’s wheat procurement drive for the current year till Friday fell more than 54% from a year ago level to 18.66 MT.