US, EU, Canada See Red on India Raising Pulses Tariff

India’s decision to raise the import duty on pulses has irked top farm produce exporting countries, including Canada, Australia, the EU and the US. At the World Trade Organisation, they have raised questions over Delhi’s claims of achieving food security objectives.

According to a Geneva-based trade official, India has responded saying the recent increase in tariff was based on the demand-supply equation and that it did not breach WTO rules.

A Commerce Ministry official said that “By linking the decision to increase import duties on pulses with food security some developed countries are trying to create confusion. Since India cites food security concerns to demand that its MSP programmes should not be subjected to caps, some members want to show that the country’s policies are faulty. We will not allow the discussion to be diverted.”

Canada’s concern

India raised the import duty on yellow peas to 50 per cent in November 2017 while imposing a Customs levy of 30 per cent on chana (gram) and masoor (red lentil) in December 2017. Canada has already taken up the issue of raised import duties on yellow peas with Delhi as it is the biggest supplier of the variety to India and fears that its pulses trade will be adversely affected.

Other countries that have raised concerns on the import duty on pulses include Russia and Ukraine. The matter was on top of the agenda of the meeting of the WTO Committee on Agriculture’s earlier this week.

Delhi explained that the objective behind the move was to balance the interests of consumers and suppliers. “India said that the increase in applied tariff is within the country’s committed bound rate of tariff,” the Geneva-based official said.

India’s pulses production in 2016-17 increased substantially resulting in a glut and prices falling in the domestic market. The production of chana, for instance, surged about 40 per cent to 23 million tonnes resulting in prices falling below the MSP.

Protecting domestic prices

“The imposition/increase in the import duty on pulses was needed to ensure that domestic prices did not dip further raising the distress levels of farmers,” the Commerce Ministry official said.