In a strategic move aimed at bolstering domestic supply and regulating prices, the Indian government has extended the duty-free import policy on tur (pigeon pea) and urad dal until March 2025. Without quantitative restrictions, this policy was initially set to expire in March 2024 but has been prolonged to provide a cushion against potential challenges in the pulse market.
Government’s Prudent Step
The Directorate General of Foreign Trade (DGFT) conveyed this decision, highlighting the importance of sustaining an unfettered tur and urad dal flow into the country. The move comes on the heels of the recent duty-free import allowance for masoor (lentil), showcasing the government’s commitment to maintaining stability and addressing supply-demand trends in the pulse sector.
The journey began on May 15, 2021, when the government permitted the duty-free import of tur, urad, and moong dal. Initially valid until October 31, 2021, the policy extension became imperative due to lower rainfall affecting domestic production. With the latest decision, the government aims to fortify the pulse sector, ensuring ample availability and averting potential price spikes.
Inflation Containment And A Dual Strategy
Parallelly, on December 21, the Centre granted a year-long extension for the duty exemption on masoor dal (lentils) until March 31, 2025. This move aligns with the broader goal of containing inflation, as lentil imports, under normal circumstances, attract a 30 percent Customs duty. The decision is anticipated to benefit importers and bolster overall supplies in the market.
Mainly dominated by tur dal, the pulse market has experienced price hikes this year, driven by erratic monsoons impacting domestic output and fostering food inflation. Tur dal’s soaring prices led to an approximately 15-20 percent demand shift towards alternative pulses. The extension of duty-free imports is a strategic response to these market fluctuations.
Weighing in on the Pulse Predicament
Industry experts express concern over the estimated drop in Kharif season urad production, anticipating a decrease from 1.768 million tonnes in the previous Kharif to 1.505 million tonnes in the current year. The Kharif season contributes 75 percent to total urad production, with the remaining 25 percent sourced from the Rabi crop. As the pulse sector grapples with uncertainties, these expert insights shed light on the challenges and nuances of the current pulse scenario.
Thus, the government’s decision to extend duty-free imports of tur and urad dal reflects a proactive approach to navigating the pulse market’s complexities. While aimed at stabilizing prices and ensuring sufficient supply, the challenge lies in balancing domestic production and imports.