New Delhi: The West Asia war is complicating India’s re-entry into global wheat markets, but it is also redrawing trade routes in favour of its eastern heartland. As sea-bound shipments turn costlier and more uncertain, exporters are pivoting to nearby land-border markets such as Nepal and Bangladesh—leveraging faster, more reliable road and rail routes in a shift that could support better price realization for farmers in Bihar and Uttar Pradesh, three people directly involved in the process told Mint.
This comes in the backdrop of the decision of India, world’s second-largest wheat producer after China, to reopen exports of the staple food grain after nearly four years of curbs, with the rabi harvest underway. The country’s wheat production for the current fiscal year is seen at a record high of 120 million tonnes.
While Uttar Pradesh produces around 36 million tonnes of wheat annually, the highest in the country, Bihar harvests about 8 million tonnes and ranks sixth. Per farm ministry data, Uttar Pradesh accounts for about 30% of the country’s total wheat harvest, while Bihar contributes nearly 6%.
“The farmers of Bihar and Uttar Pradesh are in a favourable position to get better prices for their wheat, as they are geographically close to markets such as Bangladesh and Nepal,” said Bimal Kothari, chairman of India Pulses and Grains Association (IPGA).
“With global wheat supplies from Ukraine and Russia disrupted due to the ongoing war and shipping through the Red Sea also impacted, international prices have firmed up, creating an opportunity for farmers in these regions to realize premium returns,” said Kothari.
These export premiums are estimated at 5–10% on the domestic mandi rates.
“Being border states, Bihar and Uttar Pradesh have the advantage of supplying wheat directly to the neighbouring countries (such as Bangladesh, Nepal and Bhutan) through road and rail routes that reduces dependence on sea routes and helps exporters respond quickly to demand,” he said. These countries earlier bought the food grain mostly from the Black Sea region.
Heat may hit yields
However, heatwave conditions could affect yields and remain an important factor to monitor, Kothari cautioned.
Uttar Pradesh and Bihar have a geographical edge over other major producing states. “As transport costs play a critical role in export competitiveness, moving wheat from surplus northern states such as Punjab and Haryana to ports involves significantly higher freight expenses. In contrast, eastern states have a natural logistical advantage due to their proximity to Bangladesh, allowing quicker and more cost-effective movement of shipments,” said Binod Anand, a member of the government’s committee on minimum support price (MSP), which guarantees procurement of a farmers’ produce at a fixed price.
Indian exporters are expected to target the Bangladesh market, which remains one of the largest importers of wheat in the region.
Bangladesh’s total wheat consumption is around 7 million tonnes, of which about 6 million tonnes is met through imports. In Nepal, import requirements are estimated at 1.0–1.5 million tonnes of the total consumption of around 2 million.
According to traders, India’s geographic advantage allows shipments from eastern states to reach Bangladesh quickly and at significantly lower freight costs compared to supplies from distant origins.
“Bangladesh is likely to emerge as a lucrative export destination for Indian wheat, with farmers in eastern Uttar Pradesh and Bihar expected to benefit from proximity and lower transportation costs,” said Navneet Chitlangia.
Farmers in districts bordering Bangladesh, particularly those in east Uttar Pradesh and Bihar, are likely to see improved price realizations as exporters source wheat closer to ports and land border points. Lower logistics costs make their produce more competitive, creating new market opportunities beyond domestic procurement channels.
Soaring prices
Global prices had inched up even before the war between US-Israel and Iran started end February. The FAO Cereal Price Index averaged 108.6 points in February, up 1.1% from January, but still 3.5% lower than its level a year ago. World wheat prices rose 1.8% on-month in February, supported by reports of frost and increased winterkill risks in wheat-growing parts of Europe and the US. “Logistical disruptions in the Russian Federation and continuing tensions in the Black Sea region also contributed to the increase,” the FAO report released on 6 March said.
India’s traditional wheat export markets via sea include Bangladesh, the largest buyer, along with Indonesia, the Philippines, Vietnam, Sri Lanka, and Gulf countries such as the United Arab Emirates. During global disruptions such as the Ukraine war, exports also expanded to Egypt and Turkey.
The geopolitical disruption came just as India firmed up plans to restart wheat export. Nearly four years after imposing a blanket ban on wheat exports in May 2022, the government on 13 February reopened shipments of up to 2.5 million tonnes (mt) of the grain and 500,000 tonnes of its processed products, citing comfortable domestic stocks and a favourable production outlook.
Prior to the export ban, India was a significant exporter of wheat, with shipments valued at $2.12 billion in FY22 and $1.52 billion in FY23. However, exports fell sharply after the curbs came in, falling to $56.74 million in FY24 and declining further to just $2.03 million in FY25, reflecting the near-halt in shipments.
As per a Global Trade Research Initiative (GTRI) report, the ongoing turmoil in the Gulf region has put India’s exports of agricultural and food products worth $11.8 billion at risk. This accounts for 22% of India’s total farm exports.
Queries on the development sent to the spokespersons of Bihar and Uttar Pradesh state governments, as well as to those of Bangladesh and Nepal, remained unanswered until press time.