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Informist, Tuesday, Apr. 1, 2025

 

By Shreya Shetty

 

MUMBAI – Though the government announced the imposition of tariffs on chana imports on Thursday, there has been no major impact on prices in the domestic market yet, mainly due to the availability of ample stocks of imported chana and yellow peas, experts and traders said. The 10% tariff is also deemed too low to have a significant impact, they said.

 

The government imposed the 10% import duty on chana, with effect from Tuesday, according to a notification issued by the finance ministry's Department of Revenue late Thursday. The government had earlier allowed duty-free import of chana and some other pulses to increase their availability and bring down their prices in domestic markets. In May last year, the government had extended the exemption to Mar. 31. 

 

Though prices had risen by INR 100-INR 200 per 100 kg in various spot markets on Friday following the announcement, prices were quick to correct after the initial excitement died down, said Satish Upadhyay, secretary, India Pulses and Grains Association.

 

"There has been no major impact of the announcement on chana prices as the country is still importing yellow peas duty-free," On Mar.8, the government extended duty-free imports of yellow peas till May 31, from Feb. 28 earlier. Yellow peas are used as a cheaper alternative to chana.

 

With tariff-free imports of yellow peas, the country already has ample stocks of the legume, Upadhyay said. Around 785,000 tonnes of imported yellow peas are currently available at ports, according to a report by the association.

 

Prices of chana are nearing the minimum support price of INR 5,650 per 100 kg due to rising arrivals of the rabi crop across major spot markets. Prices have also been under pressure from high imports.

 

Chana imports in Apr-Dec stood at 360,393 tonnes, up a whopping 177% on year, according to data from the Ministry of Commerce and Industry. Meanwhile, chana production is looking up, with the agriculture ministry's second advance estimates putting output in 2024-25 at 11.5 million tonnes, up from 11 million tonnes last year.

 

"Currently, the demand for chana is low, so it has offset any positive impact on prices the announcement would have had," said Gaurav Kochar, a trader from Madhya Pradesh. Moreover, the price trend of chana in the country depends on various factors, such as rates in international market and domestic production, Kochar said.

 

"If prices fall by 10% in international markets, then imports could be same as last year," Kochar said. Lower international prices with the added tariffs could end up matching, or could even be lower than domestic prices, he explained.

 

According to Upadhyay, the 10% tariff on chana imports is too low to have a substantial impact. "If the government had levied 25-30% duty on chana imports, then the market sentiment could have boosted," he said, adding. "But currently, the 10% duty will not pose a big threat to importers and exporters, as many have the ability to absorb the difference in prices."

 

On other hand, Kochar finds the 10% duty reasonable, even if it will not have a notable impact on domestic prices. Imposing a higher duty could lead to higher prices for consumers, and could cause potential shortages if imports declined significantly, as also an overall negative impact on the domestic market, he said.

 

The duty on chana may only have a minimal impact on domestic prices in the medium term as the country already has stocks of imported chana, with 440,000 tonnes of imported chana available in various ports, Upadhyay said.  End

 

Edited by Akul Nishant Akhoury

 

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