On Friday, Lentils or Masoor Dal was exempted from customs charges, extended for one year, to March 2025, in an attempt to rein in food inflation by the central government.

According to an order issued by the Central Board of Indirect Taxes and Customs (CBIC), this exemption on Lentils, which is effective as of October 2021, will now extend until March 31, 2025, instead of the previous notification of March 31, 2024.

According to the most recent data released by the Ministry of Statistics, food inflation, which makes up almost half of the total consumer price basket, increased by 8.7% in November compared to 6.61% in October as the cost of fruits, vegetables, and pulses increased significantly during the month.

High Food Inflation; Center worried?

Pulses, the primary source of protein in the nation’s diet, saw a staggering 20.2% increase in price during the month, while the cost of fruits and vegetables jumped by 10.9% and 17.7%, respectively. The government is implementing a number of policies to lower food costs, including a prohibition on exports and a reduction in the customs charge on edible oils.

The government has been very concerned about the high cost of food, especially since the nation will be voting in new elections in 2024. The PM Garib Kalyan Anna Yojana, the Center’s free grain distribution program, has already been extended by five years, till 2028. Under this extension, underprivileged households would receive five kilograms of grains each month.

It has also implemented a number of administrative measures to maintain price stability for necessities such as rice, sugar, legumes, vegetables, and edible oils. Industry associations have been asked to make sure that domestic non-basmati rice prices are lowered to ideal levels and to take stringent measures against any profit-seeking behavior.

The unpredictable monsoon this year, which has already impacted the expansion of the farm sector, is predicted to keep pressure on food prices high. Agriculture and related industries increased by just 1.2% in the September quarter, compared to 2.5% growth in the same time the previous year.

India is the biggest importer and producer of pulses (Inc. Lentils)

According to a Finance Ministry official, the notice does not apply to the three crude edible oils; rather, it merely extends the exemption of zero duty and agri-infrastructure taxes for lentils. India is the biggest importer and producer of pulses worldwide. In the 2022–2023 fiscal year, India imported 24.96 lakh tonnes of pulses.

According to Consumer Affairs Secretary Rohit Kumar Singh, some pulses are not produced to the same extent as we consume them. The current lentil exemption has been extended until March 2025 in order to preserve the stability of the import policy and give farmers in the producing countries a clear signal from India to plan their sowing.

Normally, imports are subject to a 30% customs charge. “Importers will benefit and supplies will increase with the one-year extension of duty exemption,” stated Bimal Kothari, Chairman of the India Pulses and Grains Association.

Among all populations, pulses are a vital component of the Indian cuisine, adding much-needed protein to the diet high in carbohydrates. With 20 to 25 percent protein by weight, pulses have three times the protein amount of rice and twice the protein content of wheat.

The State of Punjab, Haryana, Western Uttar Pradesh, West Bengal delta region, coastal Andhra Pradesh, Tamil Nadu, Kerala, coastal and eastern Karnataka, and certain areas of Maharashtra are the primary regions with high output.

Due to growing demand from nations like China, the United Arab Emirates (UAE), and Bangladesh for chickpeas and lentils, India’s exports of pulses for the fiscal year are expected to set a new high.

Lentils

The average Lentils import was approximately 8 LMT, between 2015–16 and 2019–20, with a peak of 12.6 LMT in 2015–16 and a low of 2.49 LMT in 2018–19. The 30 percent import charge on Lentils that was imposed on December 21, 2017, may be the cause of this decline in imports. The same has been momentarily decreased to 10% through December 31, 2020.

The fourth advanced estimate from DES, MoAF&W, Government of India, states that 1.28 million tonnes of lentils were produced in 2022 from 1.42 million hectares of area, with a productivity of 904 kg/ha. In 2021, India was the leading importer of lentils, while Canada was the leading exporter.

In 2021, the value of lentil imports was US$ 2.85 billion and its exports were valued US$ 2.80 billion. In 2021, the total amount of lentils sold worldwide was 8.30 million tons.

By 2033, the lentil protein market is projected to have grown to a market worth of US$ 208.3 million, growing at a compound annual growth rate of 5.1% (FMI, 2023). In 2022, the size of the world market for lentils reached 14.2 million tons.

With a CAGR of 11.1% from 2022 to 2028, the market is predicted by market research firm Tridge to reach 26.7 million tons by that time (Tridge, 2022). Widely employed in the processing industry, lentils are high in potassium, copper, zinc, iron, protein, fat, fiber, folate, thiamine, and other vital nutrients (unhusked seeds, split cotyledon dahl, savouries etc.). The main legume crop grown by farmers in central and eastern India’s rice-fallow regions is lentil.

The highest producing state, according to ICAR in India is Uttar Pradesh (0.47 million tonnes from 0.49 million ha. acreage, 36.43% of national production), followed by Madhya Pradesh (0.44 million tonnes from 0.49 million, 34.55% of national production), West Bengal (10.53%), Bihar (8.84%), and Jharkhand (4.50%), depending on their share of the country’s total lentil production.

Tariff imposition up to the bound rate is the recommended approach for agricultural products as far as the WTO is concerned.

In the current financial year, the amount of pulse exports increased by 80% to 5.39 lakh tonnes (lt) between April and January. There were 3 lt of exports during the same time last year. Pulses exports from April to January increased by 73% in terms of dollars to $476 million ($275 million in the same period last year).

According to the most recent APEDA data, exports were up 85% in rupees, totaling ₹3,784 crore (₹2,048 crore). Pulses were exported in 4.1 lt during the economic year 2021–2022, valued at $379 million.

In 2022–2023 the nation exported 775,024.48 MT of pulses to the world for a total value of Rs. 5,397.86 Crores, or 672.31 USD million. The major export destinations (2022–2023) are Nepal, Bangladesh, China, United Arab Emirates, and the United States.