Imports of yellow peas are now duty-free for an additional month; export taxes on parboiled rice will remain in effect past March

India has extended the duty-free import of yellow peas by one month to the end of April as part of its ongoing attempts to lower food prices. Additionally, it has extended the 20% export charge on parboiled, or partially boiled, rice past April 1.

The deadline for the export duty on parboiled rice, which was previously scheduled for the end of March, has been lifted, according to an order issued on Thursday by the Central Board of Indirect Taxes and Customs (CBIC).

As a result, the 20% export tax on parboiled rice will stay in effect past March. The deadline was earlier extended from October 15 to March 31.

According to Mint, Previously, imports of yellow peas were permitted from December 8 to March 31 without the application of any basic customs duties or fees for infrastructure development or agriculture. In its most recent order, CBIC essentially extended the benefit by one month by stating that it will be available if the “bill of lading is issued on or before 30 days of April 2024.”

“The purpose of this decision is to increase the accessibility of yellow peas and reduce inflationary pressures,” according to MOORE Singhi’s executive director, Rajat Mohan.

According to Mint, “In order to control imports and protect the interests of domestic farmers, the government first imposed significant customs duties and instituted a minimum import price in 2019,” he stated. “This led to a significant reduction in imports.” “Yet, customs duties have been removed in recognition of the need to address pricing issues and possible supply shortages, allowing for an increase in yellow pea imports immediately.”

India hasn’t thought twice about reducing domestic inflation through trade-related policies. In an effort to lower retail food prices, the government has also subsidized the sale of rice, onions, and lentils.

Consumer food inflation stood at 8.3% in January, above the 6% seen in February 2023 but down from 9.53% in December, according to data from the Bureau of Statistics

In January, rice prices increased by 7.83%, while pulses and production increased by 19.54%.

Rainfall fluctuations in the monsoons, which put a strain on agricultural production, are largely responsible for the rise in food prices. According to the Ministry of Statistics, agricultural production is expected to grow by 1.8% in the current fiscal year, up from a 4% increase in FY23.

The rabi planting area this year up to February 2 (for winter crops harvested in spring) was comparable to the level recorded in the previous year, according to the finance ministry’s monthly economic review for January. Nonetheless, compared to the previous year, there was less rainfall, less water in the reservoir, and less kharif produced.

In spite of less rainfall, lower reservoir levels, and delayed sowing, the Reserve Bank of India reported in its monetary policy statement on February 8 that agricultural activity was holding up well. According to the central bank, rabi sowing has exceeded both the typical acreage and the amount from the previous year.