Customs duty on wheat was increased from 30 percent to 40 percent by the Indian government to curb imports and protect the domestic players in the industry.

The government intends to restrict overseas purchase so as to keep the domestic prices of wheat in check amid expectations of the country's wheat output to scale a record high this year.

The Central Board of Indirect Taxes and Customs (CBIC) informed of the hike in basic customs duty (BCD) on wheat to 40 percent through a notification on Friday.

In May last year, the government had hiked BCD on wheat to 30 percent from the earlier 20 percent.

Wheat's minimum support price (MSP) or the price at which the government buys the produce from farmers, has been fixed at Rs 1,840 per quintal, up from Rs 1,735 a year earlier. The increase in MSP was a part of the government's decision to fix the support price at a minimum of 1.5 times the production cost.

Additionally, the government plans to offload excess grain from the storage units of Food Corporation of India and state agencies by selling it in the open market. The higher customs duty are hoped to make import of wheat unviable for Indian mills especially from countries like Russia which supplies at a cheaper rate.

India's wheat production is expected to cross 100 million tonnes this season, an all-time high. The output stood at record 99.70 million tonnes in the 2017-18 crop year (July-June).