Import Duty on Lentils and Its Impact on the Indian Market

10-Mar-2025 10:54 AM

Import Duty on Lentils and Its Impact on the Indian Market  
Recent Import Duty Decision  
★ The Indian government has recently imposed a 10% import duty on lentils, whereas the industry expected the duty to be 20% or more. The primary goal of this tariff is to support domestic producers. However, its impact is expected to be limited as it may not significantly affect imports.  
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Supply and Demand of Lentils in India  
- Production (2024): 1.6-1.7 million tons  
- Estimated Imports: 1.1-1.2 million tons  
- Total Availability (excluding old stock): 2.9 million tons  
- Total Availability (including government stock): 0.7 million tons surplus  
- Total Consumption: 2.8 million tons  
★ This indicates a sufficient supply in the market, reducing the likelihood of a significant price increase. Last year, India imported 1.6 million tons of lentils without any import duty, and imports are expected to continue despite the newly imposed tariff.  
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Global Lentil Production (2024 Season) (in million tons)  
(Data sourced from the SAAF Seminar in Sri Lanka)  
- Canada: 2.43 (including 1.73 million tons of red lentils)  
- Australia: 1.157  
- USA: 0.45 (mainly green lentils)  
- Turkey: 0.36  
- Total Global Production (including other countries): 6.6 (previous year: 5.7)  
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Prospects for the 2025 Season  
- Canada is experiencing a lack of moisture before sowing, which may impact production.  
- The U.S. might impose tariffs on Canadian products, potentially affecting production strategies in both countries.  
- India’s import duty may cause foreign farmers to be cautious, influencing global supply.  
- However, since the duty is only 10%, it is unlikely to be a major obstacle for international sellers, who may adjust prices accordingly.  
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Impact on the Indian Market  
- Both domestic production and imports have remained strong, ensuring stable supply.  
- The arrival of the new crop has begun, reducing the chances of a sharp price increase.  
- The import duty may provide some support to the domestic market, but given the already sufficient supply, its overall impact on prices is expected to be limited.  
- Weather conditions and global trade policies will play a more significant role in determining lentil prices in the future.