Government Considers Reinstating Import Duties on Lentils

The Indian government is actively considering ending duty-free lentil imports by March 31. An inter-ministerial panel is likely to approve this change next week, but it remains unclear if this will also apply to gram (chickpeas). Currently, both lentils and gram enjoy duty-free status until the end of March, coinciding with the expected arrival of the new crop.

Bihar's Political Climate and Agricultural Concerns

With the assembly elections approaching in Bihar, a major lentil-producing state, the government is particularly concerned about the potential impact on local farmers. The Agriculture Ministry has raised concerns about falling market prices once the new crop arrives, potentially causing dissatisfaction among farmers. The government has set this season’s increase in minimum support price for lentils.

Trade sources estimate that private and public sector agencies currently hold about 0.55 million tonnes of lentils. Continuous imports could depress prices further in April, when the new crop hits the market. From April to November of this financial year, India imported 0.59 million tonnes of lentils. Estimates for December 2024 are just over 5 tonnes. Total imports from April to December 2024 were about 1.093 million tonnes, down from 1.681 million tonnes during the same period the previous year.

Lentil Cultivation and Import Patterns

The area sown with lentils has stabilized at about 1.743 million hectares, with an estimated production of 1.8 million tonnes this year, slightly up from last year's 1.791 million tonnes. Before 2021, India imposed a 30% import duty on lentils from the US and 10% from other countries. The government then reduced the US duty to 10% and allowed duty-free imports from other major producers like Canada and Australia. In 2023, India lifted retaliatory customs duties on US pulse imports.

Conclusion

As the government considers reintroducing import duties on lentils. This potential policy shift aims to stabilize domestic lentil prices and support the economic well-being of farmers, especially in the context of Bihar's electoral considerations. Further updates will follow once the inter-ministerial panel makes its decision.

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