The tariff rate will remain zero until at least Sept. 30
By Diego Flammini
Staff Writer
Farms.com
Canadian lentils will have free access to a major overseas market, at least temporarily.
On Feb. 12, India’s Ministry of Finance announced it is removing tariffs on all lentil imports and will revisit its stance on Sept. 30.
Prior to the notice, Canadian lentils entering India faced an 11 per cent tariffs.
The only country not to have its tariffs removed is the U.S. Lentils from the U.S. will still face a 22 per cent tariff.
India first placed tariffs of 33 per cent on both lentils and chickpeas in 2017 and have made multiple changes to its policy over the years.
Abrupt amendments in India’s tariff requirements is par for the course, said Mac Ross, director of market access and trade policy for Pulse Canada.
“It’s been this way for a number of years now where there’s been a lack of transparency and predictability as to when and why India will be revising their trade policies,” he told Farms.com. “We’ve been advocating for a long time for India to publish long-term guidance about how their trade policies are going to change.”
As far as why India is reducing the tariffs now, the price of food could be a main issue.
The move “is meant to address food price inflation concerns,” said Moe Agostino, chief commodity strategist with Farms.com Risk Management.
India’s labour ministry stated food inflation in January was at 6.22 per cent compared to 2.38 per cent in January 2021.
Politics could also at play.
India is scheduled to have multiple elections this year.
“Important state elections are happening this year and food affordability is always an important topic,” Ross said. “That’s probably another reason why we’re seeing this tariff drop.”
The Canadian lentil industry likely won’t experience significant gains during this low-tariff window.
India’s farmers are preparing for lentil harvest and the ministry of agriculture projected a harvest of 1.58 million tonnes. If achieved, this volume would be slightly below the country’s record of 1.62 million tonnes in 2018.
“Any additional imports will be fairly modest if anything,” Ross said. “Maybe we see more of a decline in the destination price in India, but it’s unlikely we’ll see any impact at the farm gate in Canada.”
Pulse Canada continues to look for additional markets for pulse crops.
The organization’s “25 by 2025” strategy aims to have 25 per cent of Canadian pulse production utilized in new market and use categories by 2025.