India-Canada diplomatic row may trigger dal shortage in India
The recent diplomatic rift between India and Canada over the killing of Khalistani leader Hardeep Singh Nijjar has raised concerns about a potential dal or lentil shortage in India. Canada was the top supplier of dal to India in the previous financial year. However, India's dal imports from Canada have reportedly dropped following the row over Nijjar's killing. While reduced imports may hurt Canadian farmers and traders, they also raise the staple's price in India.
Why does this story matter?
Amid rumors of strained relations between India and Canada, the latter indefinitely deferred bilateral trade talks. Subsequently, Canadian Prime Minister Justin Trudeau accused the Indian government of Nijjar's killing, marking a new low for bilateral ties. Separately, India is also struggling with a poor crop owing to lower acreage and delayed monsoon, which has raised prices domestically. While India has adopted a stern approach toward Canada, the government would avoid any further price inflation ahead of the upcoming elections.
Indian demand for Canadian pulses drops
After Trudeau's allegations, Indian demand for Canadian exports has dropped by 6% to around $770 (Rs. 64,090) per metric ton. Canadian exporters, on the other hand, said that although Indian buyers have become hesitant, the global demand for pulses continues to be strong. Indian importers are concerned that the government may impose trade restrictions in the wake of the diplomatic row; however, Indian authorities have stated that the government has no such plans.
Government promises no supply disruption, turns to Australia
The government has also assured that the country's lentil supply will not be disrupted due to the conflict with Canada. India is reportedly turning toward Australia, and this year's imports from the latter have already surpassed those from Canada, iGrain India's Rahul Chauhan said. The government is diversifying imports and has also maintained a zero percent import duty on lentils. Last year, India restricted wheat exports amid reduced output and non-basmati white rice earlier this year to preserve supplies.
Dal imports from Canada surged earlier this year
In the previous fiscal year, India imported 485,492 metric tons of lentils worth $370 million (Rs. 3,080 crore) from Canada, which was over half of India's total imports. The imports from April to July jumped 420% to 190,784 tons compared to the corresponding period a year ago, the Ministry of Commerce's data showed. India's total dal consumption stands at 2.4 million metric tons, of which 1.6 million metric tons are produced domestically.
Other countries India imports lentils from
Aside from Canada and Australia, India imports lentils from Russia, Singapore, Turkey, and the United Arab Emirates. Moreover, the Finance Ministry fully exempted the customs duty on lentils imported from the United States (US) recently. Now that US lentils are permitted, no supply issues are expected, according to a government official.
