Best known for its activities in the energy, petrochemicals and textiles sectors, a subsidiary of Indian conglomerate Reliance Industries - the country's largest publicly traded company - has become India's second largest wheat exporter, despite a ban on wheat exports.

On 13 May, India announced a sudden ban on overseas sales of wheat except for exporters who already had letters of credit (L/Cs) for exports of the grain in place.

Even though it was not trading in wheat at the time of the ban, Reliance Retail, had already obtained at least one L/C for wheat exports.

Export ban

India suddenly banned exports of wheat in May due to soaring global prices largely precipitated by lack of supply from warring Ukraine and Russia, which together normally account for nearly one-third of global wheat exports (DC World News, 16 May 2022).

But in a notice issued on 13 May by India's ministry of commerce and industry said that exports already arranged under L/C terms would be allowed. "As a transitional arrangement, export will be allowed in case of shipments where irrevocable L/Cs have been issued on or before the date of this notification, subject to documentary evidence as prescribed," the notice said.

L/C in place

Reliance Retail had at least one L/C for US$85 million issued on 12 May, enabling it to trade about 250,000 metric tonnes of wheat according to the Al Jazeera news channel, which claims to have seen a soft copy of the L/C documents.

After a total pause in wheat exports in the days after the ban, shipments out of India restarted around 22 May, with only companies with L/Cs dated 13 May or earlier allowed to ship wheat.

Of the 2.1 million tonnes of wheat exported since, about 334,000 metric tonnes is attributable to Reliance, second after ITC's 727,733 metric tonnes, according to Al Jazeera.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.