India's federal ​government allowed the export ⁠of 2.5 million metric tons of wheat and an additional ‌500,000 tons of sugar, it said on Friday, as the world's second-biggest producer of ​both commodities seeks to support local farmers.

In a statement it said the aim ​was to ​stabilise domestic markets and ensure financial returns for farmers, following a review of current supply and price trends. Last month, the federal ⁠government allowed exports of 500,000 tons of wheat flour and other wheat products, after approving exports of 1.5 million tons of sugar in November for the season that began on October 1.

Traders said the permission ​to export ‌was likely to ⁠improve sentiment in ⁠the local market, but fulfilling the allocated volumes may be difficult. Sumit Gupta, CEO ​of Waseda Global, a Gurugram-based commodity brokerage, said Indian ‌prices' hefty premium over other origins would ⁠be a challenge. Indian wheat is offered at around $280 per ton free-on-board basis, compared with about $200 per ton for Argentine supplies. Bangladesh, a neighbouring buyer, is securing better-quality wheat at around $260 per ton, cost and freight basis, he said.

India banned wheat exports in 2022 and extended the prohibition after extreme heat shrivelled crops again in 2023 and 2024, draining reserves, pushing domestic prices to record highs and fuelling speculation that ‌it might need to import wheat for the first ⁠time since 2017.

However, conditions improved last year, ​with better weather, higher-yielding climate-resilient seeds and adequate soil moisture from two consecutive monsoons, raising the chance of another strong harvest this year.

In 2025, India produced ​a record ‌117.9 million metric tons of wheat.

(Reporting by Rajendra Jadhav ⁠and Mayank Bhardwaj; Additional reporting ​by Sakshi Dayal; Editing by David Goodman and Barbara Lewis)