India Region

Limited effect on Lentil after slashing taxes in India

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23 February 2022, New Delhi: Although the Central Government has reduced the customs duty on lentils imported from Canada and Australia to zero percent and on American lentils from 30 percent to 20 percent to increase the supply and availability of pulses in domestic market to control the prices. As per Igrain India a firm doing research in agri Commodities Industry trade sector experts says that this decision of the government will have limited effect as the prices in the exporting countries will go up and the price may come down a bit when new goods of lentils start arriving in India. There is an import duty of 66 per cent on Desi Chana, 44 per cent on Kabuli Chana and 50 per cent on Peas.

The government had earlier reduced the customs duty on lentil imports from Australia-Canada to 11 per cent from 33 per cent. Lentil exports from Australia to India are expected to increase somewhat after the import duty is abolished. Australian crop is good this season and farmers still have good stocks.

Some concerns are being expressed in India. Farmers’ organizations believe that the government should not have abolished the import duty on lentils as the harvest time is approaching as it may harm Indian growers. But the government says that the change in customs duty will have no effect on Indian farmers.

India has to import lentils to meet its needs. The cut in import duty will be applicable to all Canada, Australia as well as other exporting countries. Since lentils are currently being imported on a large scale from Australia, the decision of the government is being linked.

According to government data, India has an annual demand of about 21 lakh tonnes of lentils. Last year, the country produced 14.50 lakh tonnes of lentils, while the production in the current year is estimated to reach 15.80 lakh tonnes. It is understood that in the marketing season of 2021-22, the country will need to import about 6 lakh tonnes of lentils, while the import requirement may increase to a maximum of 10 lakh tonnes if domestic production declines.

India has already imported 5.69 lakh tonnes of lentils in the current season. If the domestic production is close to 15 lakh tonnes, then a surplus stock of 2.69 lakh tonnes can be saved and as a result, the domestic market price of lentil may fall between Rs 6000 / 6500 per quintal from Rs 6800 / 7200 per quintal at present. Is. If further price rises above Rs 7200 per quintal, the government may consider introducing lentils from its buffer stock in the domestic market.

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