Indian Government Plans to Reimpose Duty on Lentil Imports

The Indian government is considering reintroducing import duties on lentils before March 31, 2025. As part of efforts to stabilize prices and protect domestic farmers. Currently, lentils are being imported duty-free. But officials fear that continued imports could cause a price crash once the new harvest reaches markets next month.

According to government sources, an official notification regarding the import duty reinstatement is expected next week, pending approval from the inter-ministerial panel.

Why Is the Government Concerned?

Lentil prices in India are already under pressure, with mandi rates currently ranging between USD 0,68 per kg in Madhya Pradesh and USD 0,78 per kg in Uttar Pradesh. This is below the Minimum Support Price (MSP) of USD 0,81 per kg set for the upcoming harvest. If imported lentils continue flooding the market, prices could drop even further, potentially creating dissatisfaction among farmers.

Additionally, Bihar, one of India’s major lentil-producing states, faces elections later this year. This has prompted the government to prioritize farmer interests by ensuring stable crop prices. Officials believe that reintroducing import duties could help curb price fluctuations and prevent distress sales by local farmers.

Lentil Imports and Domestic Supply Trends

India mainly imports lentils from Canada and Australia, which have benefitted from duty-free access in recent years. Between April and November 2024, India imported 590,000 tonnes of lentils, with an additional 50,000 tonnes arriving in December.

This brings total imports for April–December 2024 to 1.093 million tonnes. Which is lower than the 1.681 million tonnes imported during the same period in 2023. Despite the decline in imports, domestic supply remains comfortable. As the lentil cultivation area has remained stable at 1.743 million hectares, with an estimated production of 1.8 million tonnes this year.

Before 2021, India had an import duty of 30% on lentils from the US and 10% on other countries. Later, the government reduced US tariffs to 10% and allowed duty-free imports from other countries, aiming to control food inflation. However, as supply levels improve, the government is now reconsidering its tariff policy to balance the interests of consumers and farmers.

Benefit For Farmers

If the import duty is reintroduced, prices could firm up, benefiting farmers. However, traders and importers are urging the government to carefully assess domestic demand before making any policy changes.

With the Rabi harvest approaching, the real impact on prices will depend on the size of the new crop and market demand. If supply outpaces demand, lentil prices may remain under pressure despite the introduction of duties.

Market analysts suggest that importers may rush to bring in more shipments before any new tariffs take effect, potentially flooding the market with additional stock in the short term.

Conclusion: Will the Government’s Decision Support Farmers?

As India moves closer to the Rabi harvest season, the government is at a critical juncture—balancing farmer concerns, import policies, and consumer affordability. If import duties are reinstated, it could help stabilize farmgate prices. But it remains to be seen how the market reacts to these potential policy changes.