India likely to extend wheat import tax beyond March - sources

By Mayank Bhardwaj

NEW DELHI (Reuters) - India is likely to extend a wheat import tax beyond March to shield its domestic farmers from cheap imports particularly as wheat from the new-season harvest will become available by the end of this month, government sources said on Monday.

After consulting the food, farm and trade ministries, the finance ministry now looks likely to extend the duty until September, the sources, who requested anonymity because they are not authorised to talk to the media, said.

India, the world's biggest wheat producer after China, imposed an import tax of 10 percent in August last year, reinstating it after a gap of eight years following big wheat imports from overseas.

In October, the government raised the import tax, which expires on March 31, to 25 percent.Once the tax is extended, Prime Minister Narendra Modi's ministers will review the decision in June when they will have a clear idea about the size of this season's crop, the sources said.

Food ministry spokesman N.C. Joshi declined to comment.

Indian farmers, who grow only one wheat crop in a year, will start their harvests from end of March and April, after planting the crop in October and November.

There has been some concern from farmers and experts about the size of the crop because of wet weather. But Farm Minister Radha Mohan Singh expects India to harvest at least 92 million tonnes of wheat in 2016, almost in line with the previous government forecast.

Output last year was 86.53 million tonnes, down from 95.85 million tonnes in the previous year, due to rains and hail flattening the crop in February and March.

On March 1, wheat stocks at government warehouses totalled 16.9 million tonnes against a minimum requirement of 13.80 million tonnes.

(Reporting by Mayank Bhardwaj. Editing by Jane Merriman)