India cuts tariffs on lentil imports, opening door to Australian growers after three years

The world’s second-most-populous country announced its 33 per cent tariff would be slashed to 11 per cent until the end of August.

When introduced in 2017, the tariffs ended the trade, in effect, with Australia, leaving growers sitting on large stockpiles following a bumper season.

From the 2011-12 season to the end of 2017, Australian lentil exports grew by a whopping 2,003 per cent, worth $196 million.

India then imposed a 30 per cent tariff, with an additional 10 per cent tax, making the effective rate 33 per cent.

An Indian Government Gazette dated June 2 announced a tariff of 10 per cent (plus 10 per cent tax) would be applied to red lentils until August 31, making the new effective rate 11 per cent.

The reduction applies to all countries except the United States.

Australian chickpeas, worth $1.14 billion in exports to India in 2016-17, will not be subject to tariff reductions.

Andrew Weidemann says the temporary reduction is good news.

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Grain Producers Australia chairman Andrew Weidemann welcomed the reduction as “good news” for the grain industry, which was recently blindsided with a tariff hike on barley exports to China.

“For farmers that have lentils stored, this is good news,” he said.

“Scott Morrison and Indian Prime Minister Narendra Modi are meeting today, and we’ve been pushing for them to ensure grain, particularly barley and pulses, are part of that conversation.”

Australia produced 543,000 tonnes of lentils in 2018, falling to 323,000 tonnes last year, mostly in Victoria and South Australia.

It is uncertain, however, how much of the crop remains in storage.

Mr Weidemann said prices spiked by $50 a tonne for larger red lentils following news of the tariff reduction.