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India is in talks with Moscow to import Russian wheat at discount prices in an attempt to push down food inflation ahead of the upcoming elections next year, Reuters reported on Aug. 17, citing four unnamed sources.
"The government is exploring the possibility of imports through private trade and government-to-government deals. The decision will be made cautiously," one of the sources told Reuters.
The discussed measure would come as part of broader efforts by New Delhi to bring down prices of basic goods to alleviate the inflation's impact on the poor, the news agency said. The final decision will reportedly be taken within the next weeks.
As Reuters noted, India has not imported a significant amount of wheat through diplomatic means since 2017.
Russia's decision to unilaterally terminate the Black Sea Grain Initiative on July 17 caused spikes in grain prices and sparked fears of food insecurity worldwide, particularly in the Global South.
The deal, brokered by Turkey and the U.N. in July 2022, allowed Ukraine to export its agricultural products amid the ongoing full-scale invasion. The agreement had allowed for nearly 33 million metric tons of food to be exported through Ukrainian ports while it was in force, according to the U.N.
Moscow seeks to plug the hole in the market left by the grain deal's collapse. Russian President Vladimir Putin has offered to supplant Ukrainian exports to Africa with Russian grain.
Next to African countries, India also represents a significant market for Russia's agricultural products.
"Russia has indicated its willingness to offer a discount on prevailing market prices. There are no restrictions on the export of food commodities from Russia," one of the sources told Reuters.
"India can easily secure a discount of $25 to $40 per ton from Russia. This will ensure that the landed cost of wheat remains significantly below local prices," a Mumbai-based dealer said.
As Reuters noted, India also imports sunflower oil from Russia and settles payments in U.S. dollars, planning to use the same approach on wheat imports.