While India has hiked import duty for pulses to balance the interests of consumers and suppliers, it has evoked protests from supplier nations.
Consequently, the developed vs. developing countries tussle at WTO has also came to the fore in this issue.
What caused the problem?
The Action - India’s pulses production in 2016-17 increased substantially resulting in a glut and prices falling in the domestic market.
The production of chana, for instance, surged about 40% to 23 million tonnes resulting in prices falling below the MSP.
To arrest further price fall, India raised the import duty on yellow peas to 50%, 30% on chana (gram) and masoor (red lentil), towards the end of 2017.
The Reaction - Canada is the biggest pulse supplier to India and fears that its trade will be adversely affected due to these decisions.
As Canada, Russia and Ukraine have raised these issues it was on top of the agenda at the recent meeting of WTO’s committee on Agriculture.
Additionally, the duty also seems to have irked other top farm produce exporting countries, like Australia, EU and US.
They’ve raised questions on Delhi’s claims of needing exemptions (like the 2013 peace clause) in order to achieve its food security objectives.
What is India’s case?
India has indeed been citing food security concerns to demand that its MSP programmes should not be subjected to caps.
But by linking the decision to increase import duties on pulses with food security some developed countries are trying to create confusion.
India sees this as a case of agri-surplus developed nations want to project that India’s pricing policies are faulty to better position their case.
India has responded saying the recent increase in tariff was based on the demand-supply equation and that it did not breach WTO rules.
Further, India vouched that the increase in applied tariff is within the country’s committed bound rate of tariff.
