Indian tariff on chickpea and lentil

Posted in Marketing and trade on Dec 27, 2017

Indian tariff unhelpful to pulse trade

On Thursday 21 December, the Indian Government announced a 30% tariff on imports of chickpeas and lentils, effective immediately. This will hit Australia’s two most important pulse crops hard, right in the middle of our harvest and when much of our export trade is getting under way for the year. This move follows hot on the heels of the 50% tariff impost on field peas announced about a month ago.

“There are two impacts,” said Pulse Australia Chairman, Ron Storey. “First, there is the product on the water, for which Pulse Australia believes the Indian Government ought to provide a tariff exemption. Initial indications are that some 200,000 tonnes (around A$150 million) of Australian chickpeas and lentils are in transit to India and may be affected.”

“The Indian Government should provide an exemption for Indian importers for product contracted and shipped prior to the new tariff being announced,” said Mr Storey. “Indian buyers and Australia sellers have contracted in good faith, and the prior conditions should apply to permit smooth execution of those contracts.”

Pulse Australia has already made this request via Australian Government channels in India and is also working with Canada, whose position will be similar to Australia, to clarify this matter. “Second, there is the longer term issue of the impact of tariffs on food security,” said Mr Storey. “While India strives for self-sufficiency in pulse production, most projections are that India’s reliance on imports for the foreseeable future must continue to guarantee the security of this vital protein source for the Indian population.”

Market interventions such as those seen over recent months in India create uncertainty and commercial risk for countries such as Australia, which strives to be a reliable food exporter. Strong, trusted trading relationships with India underpins India’s food security. Pulse Australia and the wider grains industry will work with Australian Government agencies to address these issues of international trade with India.

On a brighter note, Australian growers can take heart from signs of stronger demand for Australian chickpeas and lentils from other markets such as Bangladesh and Pakistan. Recent business will help the supply chain keep our exports moving.

The Australian pulse industry has worked extremely hard over a period of 25 years to become a more reliable and sustainable producer of pulses – a key protein supply for the world’s population. This has proven a stunning Australian success story, with pulses currently sitting at #2 or #3 in value of Australian broadacre cropping exports, as well as contributing to farm sustainability.

Pulse Australia understands that agriculture has seasonal risks, which introduces uncertainty at times, making it all the more important that short-term actions not add further uncertainty and harm commercial confidence. Pulse Australia will work with its members and the Australian Government to maintain the growth agenda of the Australian pulse industry.

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