India’s pulse market is experiencing a dramatic shift, with Australia emerging as the dominant supplier of lentils, significantly reducing the country’s reliance on Canada. This development is driven by a combination of factors, including increased Australian production and India’s ambitious goal of achieving self-sufficiency in pulses. This comes at a time when diplomatic tensions between India and Canada are casting a shadow over their trade relations. However, trade experts are confident that the pulse trade will remain unaffected by these political developments.
Traditionally, Canada has been the major supplier of lentils to India. However, recent years have seen a change in the import landscape. According to data from the department of consumer affairs, in 2023, Canada and Australia accounted for 45.41% and 51.25% of India’s lentil imports, respectively. This year, the roles have reversed, with Australia accounting for 66.3% and Canada 26.4%. This shift can be attributed to Australia’s emergence as a reliable and affordable alternative for lentil supplies.
Simultaneously, India has been actively promoting domestic pulse production by offering higher support prices to farmers. This has resulted in a significant increase in lentil production, further reducing the reliance on imports. Currently, India’s lentil stock stands at around 800,000 metric tonnes, providing ample supply to meet domestic demand. The average retail price of masur (lentils) is currently above the minimum support price, ensuring that farmers receive fair compensation.
In addition to Australia, India imports lentils from a range of other countries, including Russia, Turkey, the USA, UAE, Singapore, and Sri Lanka. However, the volume of imports from these countries remains significantly lower compared to Canada and Australia. India’s total lentil import in 2023 reached 1.51 million tonnes.
India’s annual lentil consumption ranges between 2.6 and 2.8 million tonnes, with imports fulfilling around 1.5 million tonnes of this demand. The production of lentils, a winter crop, has significantly increased in recent years, rising from 1.1 million tonnes in FY20 to 1.79 million tonnes in FY24, representing a 62.4% increase over the last five years.
Despite the increased domestic production and sourcing from other countries, some trade experts believe that India will still need to rely on imports from Canada to some extent. They point out that a complete shift to Australian imports could disrupt trade dynamics and potentially lead to unfavorable terms from Australia. However, they emphasize that the ongoing diplomatic tensions are unlikely to have a significant impact on the pulse trade.
India’s government has set a target to achieve self-sufficiency in pulses by 2027. This ambition is fueled by the ‘Atmanirbhar Bharat’ initiative, which aims to reduce India’s dependence on imports. The government has launched the e-Samridhi portal to facilitate the registration of farmers who are adopting crop diversification, particularly those cultivating pulses. The portal also guarantees minimum support prices for farmers who register, providing them with a secure market and fair compensation, thus encouraging greater participation in pulse cultivation.
Both the government and industry experts maintain that the bilateral pulse trade will continue as usual, unaffected by the ongoing diplomatic tensions. The India-Australia Economic Cooperation and Trade Agreement (ECTA), signed in April 2022, further strengthens the trade relationship between the two countries. Meanwhile, negotiations between India and Canada on the free trade agreement (FTA) have been halted due to political tensions in September 2023.
In conclusion, India’s pulse market is undergoing a significant transformation, with Australia becoming a key supplier. This shift, fueled by increased domestic production and Australia’s competitive position, is positioning India towards its goal of self-sufficiency in pulses. While diplomatic tensions with Canada cast a shadow over trade relations, the pulse trade is expected to remain unaffected, ensuring a steady supply of lentils to meet India’s growing demand.
