Government Extends Import Duty Exemption on Lentils until March 2025

The Indian government has announced a significant extension in the import duty exemption on lentils, specifically masoor dal, until March 2025. This decision comes amidst rising concerns over food inflation and shifting consumer demands within the pulse market.

The Ministry of Finance has prolonged the relief on import duties for lentils, aiming to ease inflationary pressures and ensure an adequate supply of lentils in the market. The extension of this exemption, previously set to expire on March 2024, has been hailed as a crucial measure to support importers and enhance the availability of lentils across the nation.

However, the government has not changed the import duty structure on crude edible oils like palm oil, soyabean oil and sunflower oil which are set to expire in March 2024.

This move arrives in the wake of a notable surge in lentil imports throughout the ongoing fiscal year. As certain segments of consumers have shifted from traditionally preferred tur (arhar) dal to masoor dal due to soaring prices of the former, lentil imports have witnessed a considerable uptick. The erratic monsoon, impacting domestic tur dal output and subsequently fueling food inflation, has triggered a change in consumer preferences toward more affordable alternatives like masoor dal.

According to industry estimates, the high prices of tur dal have prompted a reduction in demand by approximately 15-20 percent, indicating a noteworthy shift in consumer behavior within the pulse market. Importantly, this shift has led to a significant increase in the import volume of lentils, particularly masoor, as consumers seek alternatives amidst price fluctuations.

Moreover, as the current rabi cropping season progresses, there has been a notable increase in acreages under masoor, surpassing last year's levels. While the overall acreage for rabi pulses has decreased, favorable weather conditions in key growing regions are anticipated to boost masoor yields by an estimated 5-10 percent compared to the previous year.

This extension in import duty exemption aligns with the government's efforts to stabilize prices, cater to changing consumer preferences, and ensure a steady supply of lentils in the domestic market. It stands as a strategic measure to mitigate inflationary pressures and support both importers and consumers amid dynamic shifts in the pulse industry.