India considers cutting import duties on pulses to cool prices, sources say

NEW DELHI/MUMBAI: India is contemplating reducing tariffs on pulses to alleviate food inflation, according to government and industry sources. The proposal focuses on lowering import duties on lentils and yellow peas, while excluding chickpeas. Presently, India imposes a 10% import tax on red lentils and chickpeas, and a 30% duty on yellow peas.

The government has allowed duty-free imports of pigeon peas and black gram until the end of this fiscal year in March 2027. India stands as the world's leading producer, consumer, and importer of pulses and increasingly depends on imports to meet the gap between domestic production and demand. In the fiscal year 2024-25, imports accounted for around 23% of total pulse consumption, with India producing 25.7 million tons and importing 7.3 million tons.

Major suppliers of pulses include Australia, Canada, Russia, Myanmar, and various African nations. India is also exploring the possibility of reducing vegetable oil import taxes to counter rising prices. Pulses are primarily grown in rain-fed regions, and the current crop yield is expected to plunge significantly due to an unusually low monsoon season.

This year's yield reduction is anticipated as top-producing states received up to 30% less rain than average during the June-September monsoon period. The government may encourage larger chickpea cultivation by retaining import duties on the crop. Prime Minister Narendra Modi's government has already cut import tariffs on vegetable oils and adjusted sugar exports to stabilize prices.

Pulse demand typically surges during India's festive season, particularly for chickpeas, as households, millers, and food processors stock up before festivals. India has been experiencing increasing food inflation, with the inflation rate standing at 5.95% in August. Pulses have remained priced high, with inflation rates at 5.6% for pigeon peas and 7.4% for black gram compared to the previous year.