Duty-free pulses import extended by a year

The government has extended the zero duty on import of pulses by yet another year till 31 March, 2009, which otherwise was to expire on 31 March, 2008. This is the second consecutive extension in less than three months.

The step is being seen as a measure taken by the government to ensure smooth supply of pulses and at the same time keeping the prices of essential commodities under check. In March this year, government had extended duty-free import of pulses till March next year on the back of spiralling prices in the domestic market.

"It is a welcome step from the government which will surely boost confidence among the importers fraternity in the country," said K C Bhartiya, president, Pulses Importers' Association.

He, however, added that government also should ensure that it would not go back from this stand during the period by bringing any changes in the policy.

The country (world's largest consumer and importer) imports around 18-20 lakh tonne of pulses every year. The domestic output is hovering around 135-150 lakh tonne over the last few years.

Industry sources said such an extension is, in fact, a long period. "Normally we have such duty-free import period of 6-8 months, but this time it is comparatively longer," said marketmen.

Though it is widely understood that prices will now be far more controllable, some importers expressed concerns on expected rise in global rates.

"There is a possibility of escalation in import rates as the latest action from the government will increase the pulses inflow into the country," said S P Goenka, a Mumbai-based pulses importer. Market sources said the import rates on an average in the last one month has slipped by around 10 per cent.

However, analysts see this as a short-term measure. "The root cause of soaring pulses has not been addressed. Apart from imports, attention needs to be shifted to increase the domestic production of pulses which has been stagnant for the last couple of years," said a commodity analyst.

"Imports cannot always be the solution to curb prices. Very long-term measures stretching up to 10 years are the need of the hour for a long-term stability in essential commodities," said market sources.