The benchmark wheat index rose as much as 5.9% in Chicago, the highest it has been in two months.
The export ban comes as a heatwave has hit India's wheat crops, taking domestic prices to a record high.
Wheat prices have soared by around 60% on world markets this year, pushing up the cost of everything from bread to noodles.
India's government said it would still allow exports backed by letters of credit that have already been issued, and to countries that request supplies "to meet their food security needs".
Government officials also said the ban was not permanent and could be revised.
However, the decision has been criticised by agriculture ministers from the Group of Seven (G7) nations meeting in Germany.
"If everyone starts to impose export restrictions or to close markets, that would worsen the crisis," German food and agriculture minister Cem Ozdemir said.
The G7 is an organisation of the world's seven largest so-called "advanced" economies, which dominate global trade and the international financial system. They are Canada, France, Germany, Italy, Japan, the UK and the United States.
Although India is the world's second-biggest wheat producer, it has not previously been a major exporter as most of its crop is sold on domestic markets.
But Ukraine's wheat exports plunged after the Russian invasion. And with droughts and floods threatening crops in other major producers, commodity traders were expecting supplies from India to make up for part of the shortfall.
Before the ban, India had aimed to ship a record 10 million tonnes of wheat this year.
Global food prices hit a fresh record high in March after the Ukraine war caused a "giant leap", according to the United Nations (UN).
That came as the conflict cut off supplies from the world's biggest exporter of sunflower oil - Ukraine - which means the costs of alternatives also climbed. The country is also a major producer of cereals such as maize and wheat, which have risen sharply in price too.
The UN said that global food prices eased slightly in April but remain almost 30% higher than the same time last year.
Rising food prices, along with a jump in the cost of energy, have been pushing up inflation around that world.
That has forced major central banks, including the US Federal Reserve and the Bank of England, to raise interest rates in an attempt to rein in rising prices.
That, in turn, has triggered concerns that the higher cost of borrowing could hit global economic growth, with some high-profile commentators warning of a recession.
On Sunday, Lloyd Blankfein, the senior chairman of Wall Street investment banking giant Goldman Sachs, said there is a "very, very high risk" of recession in the world's biggest economy.
Mr Blankfein's comments on CBS's Face the Nation came on the same day as Goldman Sachs economists cut their US economic growth forecasts for this year and next.
-- Courtesy of BBC News