The price of dal is a staple of Indian household budgets, and the government often uses trade policy to manage it. A recent move to lower import duties on lentils and yellow peas aims to do just that, but who really benefits from this decision?
The Policy In Question
The Government
of India is considering reducing import duties on red lentils (masoor) and yellow peas to boost domestic availability and control rising food prices. Currently, India imposes a 10% import tax on lentils and a 30% duty on yellow peas. This potential reduction follows a pattern of using import tariffs as a tool to manage the domestic market. For instance, duty-free imports of pigeon peas (tur) and black gram (urad) are already permitted until March 2027 to supplement local supplies. The context for this policy consideration is a patchy monsoon season, which has raised concerns about the output of India's rain-fed pulse crops. With the festive season approaching, when demand typically surges, the government is looking at ways to prevent sharp price hikes.
Why The Government Intervenes
The primary driver behind lowering import duties is to combat food inflation. Pulses are a cornerstone of the Indian diet and a key source of protein, making their price a sensitive issue. After a weaker-than-average monsoon in key growing states, domestic production is expected to be lower, creating a potential supply gap. By making imports cheaper, the government hopes to increase the overall supply in the market, which in theory should bring down or stabilise retail prices for consumers. This is part of a broader strategy that has also seen the government adjust tariffs on other essentials like vegetable oils to keep household expenses in check.
Potential Relief for Consumers
For the average household, lower import duties on lentils and yellow peas could translate to relief at the checkout counter. Cheaper imports allow traders to bring in pulses at a lower cost, and this saving is often passed on to consumers. With food inflation showing a rising trend, any measure that eases the price of essential food items is a welcome one. Yellow peas, in particular, play a significant role. They are often used as a cheaper substitute for gram flour (besan) and can be mixed with other pulses, helping to keep the prices of more expensive dals like chana dal in check. Therefore, an influx of cheaper yellow peas can have a ripple effect across the entire pulses market.
The Other Side of the Coin: Farmer Income
While consumers may benefit from lower prices, the move presents a significant challenge for Indian farmers. Cheaper imports arriving in the market, especially around harvest time, can depress the prices farmers receive for their own crops. This often pushes domestic prices below the government's Minimum Support Price (MSP), the benchmark rate at which the government buys produce from farmers. Farmer unions have frequently protested against unrestricted imports, arguing that it undermines their livelihoods and contradicts the national goal of achieving self-sufficiency ('Atmanirbharta') in pulses. The government faces a delicate balancing act: protecting consumers from inflation without sacrificing the financial stability of its agricultural sector.
A Complicated Global Picture
India is the world's largest producer, consumer, and importer of pulses, making its trade policies globally significant. Countries like Canada, Australia, and Russia are major suppliers. Tariff adjustments can shift global trade flows as exporters rush to sell their stock before policies change. The import policy is not always straightforward. For example, while general duties might be lowered, specific retaliatory tariffs can be applied to certain countries. In late 2025, India imposed a 30% tariff on US-origin yellow peas, a move seen as a response to American tariffs on Indian goods, causing concern for American farmers. This shows how domestic price management is intertwined with larger geopolitical and trade relationships.
