But, traders remained skeptical as to whether all these steps would have a significant impact in bringing down prices as production continued to be less than demand.
The decision today is to extend zero duty on import of pulses for one more year beyond March 31, 2009, home minister P Chidambaram told reporters after a cabinet meeting, adding that after the announcement pulses can now be imported at zero duty for one more year till March 31, 2010.
He said the government has also extended the current dispensation for public-sector companies to import 1.5 million tonne of pulses against reimbursement up to 15% of their losses and service charge for one year.
India banned export of pulses and exempted them from customs duty in June, 2006 to check spiraling prices.
But traders said the move wont have the desired impact as production continued to be less than demand. The export ban has been there for more than two years, but prices are still firm. So, how will the same measures help Reuters news agency said quoting Gopal Kogta, president of Pulses Manufactures and Exporters Association of India.
Exporters from other countries have snatched our share in world market. Now, we may lose it permanently, he added. Before export ban, India was exporting up to 3% of its total pulses output.
Government should make efforts to increase production. That will help in bringing prices down, Kogta added. Meanwhile, commenting on allowing duty free import of pulses for one more year, KC Bhartiya, president, Pulses Importers Association of India said prices are going to stay at these levels, because the production is not promising.
Indias pulses output in 2008-09 may fall by 3.46% to 14.25 million tonne on year as adverse weather dented yields of summer-sown or kharif pulses, according to government estimates.
Industry estimates put the countrys annual demand at 19 million tonne. To fill the gap between production and consumption India imports pulses, mainly from Australia, Canada and Myanmar.
Arrivals of chana, a major pulse, have been rising in physical markets and that may put pressure on prices for next few weeks, Reuters said quoting Radha Vallabhaji Purohit, a trader based in Nagpur, in Maharashtra.
Farmers usually start cultivation of kharif pulses from June and arrivals hit markets from August onwards, until then their prices may remain firm, traders said.