India's lentil imports from Canada slows amid strains in diplomatic ties: Report

India's lentil imports from Canada have experienced a slowdown ever since Canadian PM Justin Trudeau made the bombshell allegation about a "potential" involvement of Indian agents in the killing of Khalistani extremist Hardeep Singh Nijjar on June 18 in British Columbia.

Reuters reported that Trudeau's adventurism is showing an impact on India's import of lentils from Canada. Canadian lentil sales to India have slowed due to fears of reprisal from India that could limit trade, industry sources in both countries told Reuters.

It is to be noted that Canada is a primary source of lentil imports for India. Any reduction in purchases from India could potentially lead to lower prices for Canadian farmers during the harvest season. At the same time, it could also result in increased domestic food prices in India.

On Monday, the Delhi Chamber of Trade and Industry (CTI) wrote to Union Commerce Minister Piyush Goyal urging the Centre to ban the import of lentils from Canada to exert economic pressure on it.

Every year, India consumes around 23 lakh tonnes of pulses, of this 15-16 lakh tonnes is produced domestically and the rest is imported from other countries. India imported around 4.85 lakh tonnes of lentils from Canada last fiscal, which was worth $370 million. From April to July, India's imports of Canadian lentils surged by 420 per cent year-on-year, reaching 190,784 tons, as per data from India's trade ministry.

Amid the current tensions between the two countries, concerns have arisen within the industry about the possibility of trade restrictions imposed by the two.

Nitin Gupta, Senior Vice President of Olam Agri India, a major importer, expressed industry concerns, noting that trade restrictions might materialise in light of the strained relations. "Industry officials are concerned that there could be trade restrictions by the governments owing to current tensions between the countries," he told Reuters.

With hesitation regarding Canadian lentils, Indian buyers are now exploring alternatives, such as lentils from Australia, reducing their reliance on Canada.

"Inflation within the pulses group is currently very high, making Canadian lentils a critical need for India. Any measures taken to restrict imports would likely contribute to inflation, and New Delhi would likely avoid such actions," a Mumbai-based dealer told Reuters.

Not official yet

A senior Indian government official, who preferred to remain anonymous, refuted such plans, stating that India had not instructed importers to refrain from purchases. Nonetheless, tensions have resulted in India suspending visa issuance to Canadians, and both nations have expelled some diplomats.

Meanwhile, officials from Canada's Global Affairs Department indicated that Canada is not presently taking any direct action that would impact trade with India.

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