United States

Department

of Agriculture

www.ers.usda.gov

Electronic Outlook Report from the Economic Research Service

WRS-03-01

May 2003

India's Pulse Sector: Results

of Field Research

Abstract

India is the world's largest producer of pulses, which are an important component of the

Indian diet. Stagnant production in that country has contributed to declining per capita

consumption over the past 20 years. During this period, domestic pulse prices have

increased relative to other foods. Despite a liberal import regime, imports have generally

remained a small share of supplies. Most Indian consumers are highly sensitive to prices

when making food purchase decisions. Higher relative prices cause consumers to switch

to lower priced pulse varieties and grades, and to other food items, such as cereals and

vegetables. The recent rise in the popularity of low-priced imported dry peas demonstrates that consumers substitute nontraditional varieties into their diet based on relative

prices. U.S. dry peas are not competitive in India because of the limited market for premium grades, as well as the higher costs associated with bagging and containerized shipping. U.S. chickpeas have also been limited to a small, premium-priced niche segment

of the market.

Keywords: India, pulses, peas, lentils, chickpeas, pigeon peas, black matpe, mung beans.

Acknowledgments

The authors would like to thank Shakun Dalal, Weyland Beegley, and Joe Carroll for

coordinating the interviews in India. Appreciation is also extended to Gary Lucier,

Cynthia Iglesias, Tom Tice, Joy Harwood, and Praveen Dixit for their reviews of this

report. Excellent support was provided by the editor, Lou King, and by the designers,

Juanita Tibbs and Wynnice Pointer-Napper. Support for this project was provided by the

Emerging Markets Program of the Foreign Agricultural Service, USDA. 

Gregory K. Price, Rip Landes, and A. Govindan
India is the largest producer and consumer of pulses in

the world, accounting for about 25 percent of global

production, 27 percent of consumption, and 34 percent

of food use (FAO). It also is the top importer, with an

11-percent share of world imports during 1995-2001,

although imports have only accounted for about 6 percent of domestic consumption during the same period.

Pulse production in India has fluctuated widely with

no long-term trend, leading to a steady decline in per

capita availability over the past 20 years. Imports have

been unrestricted with relatively low tariffs during that

period—virtually the only food item afforded such

open access to the Indian market. Even with domestic

pulse prices increasing faster relative to other foods,

imports have remained a surprisingly small share of

supplies. Although the United States exports some

varieties of pulses to India, volumes are minor compared with many other pulse-exporting countries.

Moreover, U.S. market share has declined over time.

This report describes the Indian pulse market and the

United States' competitive position as a supplier to that

sector. It identifies some of the factors that affect

Indian pulse production and consumption as well as

import demand. Challenges for U.S. competitiveness

include the limited scope for quality-driven price premiums, high transportation costs, and the small volume of domestic production.

Much of the information presented here was gathered

during a tour of India in June-July 2001. Researchers

visited several cities—including Delhi, Ahmedabad,

Mumbai, Chennai, and Kolkata—due to the wide

range of pulses consumed in India, diverse regional

preferences, and varying business practices. To gain a

better understanding of the pulse sector, key players

throughout the marketing chain—importers, wholesalers, millers, retailers, snack-food manufacturers,

industry analysts, government officials, and academic

researchers—were interviewed. Information on the

U.S. dry pea, lentil, and chickpea industry was

obtained from meetings with producers, processors,

exporters, and industry associations in the Pacific

Northwest and North Dakota.

2 Economic Research Service, USDA

Introduction
Pulses are an important Indian crop, with an annual

production of about 13.2 million tons from 22.5 million hectares between 1990 and 2000. (Government of

India-b). Pulse is the common name for members of

the leguminosae (pea) family (Lucier and Plummer).

In India, the word “pulse” is used to describe the seeds

of legumes that are dicotyledons and have no seed

coats. As used in North American agriculture, the term

“pulse crop” commonly refers to dry peas, lentils,

beans, and chickpeas used as food or feed crops, but

also includes cowpeas, fava beans, and lupines. A wide

range of pulses is grown in India, primarily small

chickpeas (desi variety), pigeon peas, black matpe, and

mung beans (fig. 1). Between 1994 and 2000, desi

chickpea and pigeon pea production averaged about

5.5 million tons and 2.4 million tons, respectively.

Production of other pulse crops, including lentils,

green/yellow peas, moth beans, horse gram, blackeye

beans, and kidney beans, is relatively small.

The role of pulses in Indian crop area and production

has declined since 1970/71 (fig. 2). Pulse area has

declined relative to other crops, including wheat, rice,

and oilseeds. Moreover, in contrast with other major

crops, pulse production has remained relatively stagnant. Pulse yields have, on average, failed to show significant gains compared with other crops, a factor that

has eroded the profitability and planting of pulses relative to other crops.

The state of Madhya Pradesh is the largest pulse producer, accounting for about 26 percent of total production from 1996/97 to 1999/00 (fig. 3) (Government of

India-b). Other states with significant output include

Uttar Pradesh (18 percent), Maharashtra (14 percent),

Rajasthan (14 percent), Karnataka (5 percent), Andhra

Pradesh (5 percent), and Bihar (5 percent). In general,

pulses are grown in one of two seasons: the warm,

rainy period (May-October) or the cool, dry season

(November-April) (Meenakshi et al.). Chickpeas, lentils,

and dry peas are grown in the cool season, while pigeon

peas, black matpe, mung beans, horse gram, and moth

beans are produced during the rainy period.1

Between 1980 and 2000, harvested area allocated 

to pulses ranged from 21.1-24.7 million hectares

(Government of India-b). The shift to wheat and rice

during the Green Revolution—the period between 1967

and 1978 in which farm acreage increased, doublecropping occurred, and improved seed varieties were

planted—placed downward pressure on pulse acreage

(Ganguly). Production fluctuated significantly between

1980 and 2000, ranging from 10.6 to 14.9 million tons,

mainly due to variable yields that did not improve over

Economic Research Service, USDA 3

Indian Pulse Production

1 Black matpe and mung beans are sometimes grown in the cool

season as well.

Figure 1

India: Average pulse production by variety1

Mil. metric tons

1Production data for desi chickpeas and pigeon peas are for 

1994/95-2000/01,1994/95-99/2000 for lentils, and 1994/95-97/98 

for black matpe, mung beans, peas, and other pulses.

Desi

chickpeas

Pigeon

peas

Black

matpe

Mung 

beans

Lentils Peas Other

0

1

2

3

4

5

6

Sources: Government of India-b and c.

Figure 2

India: Area under major crops

Mil. hectares

Source: Government of India-f.

1970/71 1980/81 1990/91 2000/01

0

20

40

60

80

100

120

140

160

180

Wheat

Oilseeds

Pulses

Coarse grains

Rice

Cotton & fibers
4 Economic Research Service, USDA

Cauvery

Yamuna

Mumbai

Chennai

Kolkata

Arunachal Pradseh

Chinese line of control

Indian claim Helmand

Figure 3

Map of India

Source: Economic Research Service, USDA.
time (Government of India-b). Production has shown

little growth since the 1970s, exhibiting only a slight

upward trend over the past few years.

Few varietal improvements, combined with low

resilience to moisture stress and pest infestation, have

contributed to variable production. Only a small share

(12 percent between 1990 and 1996) of pulse acreage

is irrigated, reflecting both the rainfed conditions in

traditional pulse-growing areas and the inability of

relatively low-productivity pulses to compete with

other crops, particularly wheat and rice, for irrigated

land (Government of India-b). Pulse production is

also hampered by minimum support prices that are

generally below market prices. Thus, government

assistance is rarely triggered. In contrast, the support

prices and government procurement programs for

wheat and rice are more attractive, encouraging farmers to grow those crops.

Some states in India levy taxes on certain pulses in

order to protect their farmers. For example, Tamil

Nadu imposes a 4-percent tax on yellow/green peas

and chickpeas that are shipped across state lines. This

surcharge, which is paid by commission agents, is

intended to support local pulse production by limiting

the amount of pulses that are imported or transported

through the state.

Economic Research Service, USDA 5
India is a low-income country, and many consumers

rely on cereals and pulses as primary sources of protein and calories. Although consumption of dairy products is common, many consumers exclude meat from

their diets due to its high cost or for religious reasons.

Stagnant production, a rising population, and small

imports have caused the per capita availability of pulses to fall over time (fig. 4).

Virtually all Indians, rich and poor as well as vegetarian and nonvegetarian, consume pulses.2 However,

regional preferences exist with respect to pulse consumption (table 1). Pulses are served at home and in

all types of establishments ranging from roadside

eateries to fancy restaurants. Most pulses are consumed in shelled and split form. Some exceptions

include green peas and kabuli chickpeas (known as

garbanzo beans in the United States), which do not

have hard hulls and may be consumed whole.

Pulses are used to make dal, a thick, gravy-like dish.

Pulses are also used in curries and snack foods, such as

samosa (a deep-fried pastry stuffed with green peas and

potatoes), pakora (deep-fried vegetables coated with

chickpea flour), and pappad (fried or toasted wafers).

According to traders, Indian consumers tend to prefer

local pulses to imported varieties because of their perceived superior taste. However, few consumers appear

willing to pay high premiums for local varieties.

Role of Income in Pulse Demand

Pulse demand is positively correlated with income

(Kumar). This finding is true for all income classes—

particularly for the poorest individuals—and both urban

and rural areas. For very poor consumers, pulse consumption increases by more than 0.6 percent for a 1-

percent rise in income (table 2). Pulse demand remains

significantly more responsive to changes in income than

the demand for other food grains (e.g., wheat and rice),

but less so than other foods, such as milk, vegetables,

edible oil, and meat. This relationship contradicts recent

trends in per capita consumption and income in India.

While per capita pulse consumption has declined during

the last 20 years, per capita income grew about 3.7 percent per year in the 1990s (Government of India-f). This

suggests that other factors, particularly limited supplies

and changes in relative prices, may have accounted for

the decline in per capita consumption of pulses.

Role of Price in Pulse Demand

Index data on wholesale price movements in India indicate that prices for pulses rose significantly in real

terms—as well as relative to those for other important

food groups—from 1980 to 2000 (table 3 and fig. 5).

Rising real pulse prices provide at least a partial expla6 Economic Research Service, USDA

Indian Pulse Consumption

2 In general, pulses are not fed to animals, although the hulls and

other milling byproducts are sold as cattle feed. Only pulses with

major postharvest damage (e.g., that caused by moisture) are used

as feed. 

Figure 4

India: Per capita availability of rice, wheat, and pulses, 1970-2001

Grams/day

1970 72 74 76 78 80 82 84 86 88 90 92 94 96 98 2000

0

50

100

150

200

250

Pulses

Wheat

Rice

Source: Government of India-b.
Economic Research Service, USDA 7

Table 2—India: Expenditure elasticities of demand

Commodity Rural Urban

I II III IV I II III IV

Rice 0.183 0.106 0.035 -0.018 0.148 0.078 0.010 -0.029

Wheat -0.026 -0.055 -0.072 -0.057 0.005 -0.078 -0.125 -0.101

Coarse cereals -0.173 -0.170 -0.153 -0.097 -0.135 -0.213 -0.207 -0.119

Pulses 0.611 0.454 0.310 0.121 0.612 0.442 0.275 0.095

Milk 0.895 0.740 0.573 0.299 0.878 0.681 0.525 0.272

Edible oil 0.768 0.578 0.399 0.178 0.675 0.488 0.320 0.122

Vegetables 0.742 0.568 0.408 0.194 0.669 0.487 0.337 0.152

Fruit 0.826 0.661 0.524 0.293 0.782 0.610 0.499 0.293

Meat 1.136 1.007 0.887 0.600 1.076 0.880 0.755 0.489

Sugar 0.369 0.234 0.125 0.025 0.350 0.199 0.088 -0.013

Other food 1.241 1.107 0.996 0.739 1.198 0.979 0.868 0.585

Nonfood 2.547 2.634 2.505 1.998 2.488 2.338 2.160 1.757

I: Very poor, II: Moderately poor, III: Non-poor lower, IV: Non-poor higher.

Note: Budget shares allocated to pulses by rural (urban) consumers in 1987-88 were 5% (5.1%), group I; 4.9% (4.7%), group II; 4.5% (4.3%),

group III; 3.7% (2.8%), group IV.

Source: Kumar.

Table 1—India: Regional consumption preferences by pulse variety

Desi chickpeas Universally accepted in India. Prepared as dal to accompany meals. Used in snack foods. About 

50-60 percent is ground into flour (besan), which is used for coating fried dishes and snack foods.

Of the remaining 40-50 percent, about 25 percent is left whole and 15-25 percent is split.

Pigeon peas Second major pulse crop in India. Popular in central and southern India, with some difference in 

preference for color. Consumers in the south prefer the medium-sized, red variety, while those in 

more northern areas like the yellow type. Pigeon peas are primarily prepared as dal. Nearly all 

pigeon peas are decorticated and split. Castor oil is sometimes used as a preservative.

Black matpe Third major pulse indigenous to India and Burma. Liked throughout the country, especially in the 

south. Used in various forms (whole, shelled and split, split only, and milled). Consumed in all 

regions in the form of pappad and is the major ingredient in several foods that are popular in the 

south, including idli and vada (rice cakes) and dosa (fermented crepes).

Mung beans Popular in eastern India and Maharashtra. Typically used in split form to prepare dal.

Lentils Consumed primarily in northern and eastern India. Least preferred in the south.

Green peas Minor pulse in India. Consumed in most parts of the country due to their low price. Used in dal, 

snack foods, and restaurants. U.S. imports are confined to niche markets due to their higher price.

Yellow peas Indigenous output is small, but domestic and imported peas are consumed in most regions of the 

country. Popular in Uttar Pradesh, eastern India (West Bengal, Bihar, Orissa, and Assam), and 

southern India. Imported peas serve as a low-cost substitute for desi chickpeas and pigeon peas 

when making besan (illegal, but commonly done) and dal, respectively.

Dun peas Imported pulses that are the cheapest available in the market. Imported from Australia and consumed in the lowest income areas of eastern India. Typically "farmer-dressed"—bagged directly 

from the field without processing. Quality is low with many broken pieces, foreign matter, mottled 

appearance, and non-uniform shape.

Kabuli chickpeas Largest size commands the highest price. Reserved for niche markets and special occasions.

Smaller sizes may be substituted for desi chickpeas. Demand is localized in the north, but is 

expanding to the south.

Kidney beans Consumption confined to northern India, where they are a favored dish.

Blackeye beans Consumed in most parts of the country, but demand is limited.

Source: Economic Research Service, USDA.
nation for the decline in per capita pulse consumption

despite rising incomes.

Most Indian consumers have relatively low incomes,

and tend to be very price-sensitive buyers of most

items, including pulses. Estimates of price elasticities

of demand for rural and urban consumers confirm this

price sensitivty (table 4). For example, pulse consumption by very poor households in rural areas falls by

0.775 percent when pulse prices rise by 1 percent.

Pulse consumption is significantly more sensitive to

price changes than cereal consumption and nearly as

price sensitive as many higher value foods, including

milk, vegetables, and edible oil. Field interviews with

traders, processors, and importers uniformly support

the primary importance of prices in purchase decisions.

Market behavior with regard to quality premiums is

another indicator of consumer price response.

Although wholesalers often carry a range of qualities

for each pulse variety, they report that purchases are

heavily (roughly 80 percent) weighted toward lower

cost varieties of average to lower quality.

Pulse Substitution in the Indian Diet

Rising prices for pulses relative to substitute foods

likely contributed to the decline in per capita pulse

consumption since 1980. Substitution is not typically

between pulses and other protein-rich foods, such as

meat, dairy products, or fish. Instead, substitution

appears to be mostly between pulses and cereals, vegetables, fruit, and, to some extent, dairy products. In

the case of middle- and low-income consumers, relatively high pulse prices appear to shift consumption

toward lower cost cereals and vegetables. Among

higher income consumers, a shift away from pulses

may be due to preferences for vegetables, fruit, dairy

products, and meat, as opposed to price.

To some extent, households also substitute among

pulse varieties and qualities when price relationships

change. Indian consumers routinely make purchases

based on relative prices (given minimal levels of

acceptable quality) even when the varieties are not a

8 Economic Research Service, USDA

Table 3—India: Annual growth rates of pulse demand variables, 1980-2000

Per capita Deflated wholesale prices

Pulse con- Real Pulses Wheat Rice Milk Edible Eggs Vege- Fruit

sumption GDP oil tables

Annual growth rate, 1980-2000 (%)

-0.9 3.5 2.1 0.4 0.5 0.6 -1.0 -1.0 0.4 0.5

Note: Annual growth rates are calculated based on 3-year averages centered on 1980 and 2000.

Sources: Government of India-a and Government of India-f.

Figure 5

India: Deflated wholesale price indices for food groups, 1979-2001

1981/82=100

Eggs

Pulses

Cereals

1979 81 83 85 87 89 91 93 95 97 99 2001

40

60

80

100

120

140

160

180

200

Vegetables

Milk

Edible oil

Source: For 1979-1998, Government of India-a; for 1999-2001, Government of India-e.
traditional part of the Indian diet. If there is a significant increase in the relative price of one pulse variety,

some or all of a household's purchases may shift to

lower cost varieties. Such substitution is more likely to

occur in low-income households where pulses may

even be substituted out of the diet completely when

prices rise.

The most obvious demonstration of substitution is the

rising consumption of imported yellow peas (from

Canada and Australia) and dun peas (from Australia).

Yellow peas are traditionally produced in small

amounts in some areas of India, while dun peas are not

grown at all in India. Both are generally imported at

prices that make them the lowest cost pulses in the

Indian market, and they are quickly being integrated

into food preparations. Both varieties are particularly

popular in the low-income regions of eastern India,

including West Bengal, Orissa, Bihar, and Assam.

Although the varieties are not traditionally consumed

in those areas, consumers have readily accepted them

because of their low price. In particular, the popularity

of dun peas, which are supplied in “farmer-dressed”

condition (see table 1), show that consumers are willing to accept quality levels that are well below those of

domestic or other imported pulses.

While price is the overriding factor in purchase decisions, some consumers (mostly those with high

incomes) are concerned about quality attributes,

including size, color, cooking time, shape, and taste.

Based on rough weights assigned by wholesale traders,

this segment of the market comprises about 20 percent

of consumption. While these individuals are willing to

pay more for higher quality, a limited survey of market

prices suggests that the price premiums are generally

small, ranging from 5 to 10 percent.

Low demand and small premiums for higher quality

pulses are derived from the use of household labor for

sorting. It is common for Indians to clean and sort

pulses (as well as rice, wheat, and other foods) prior to

cooking. Lower income households prefer to perform

this operation in order to avoid paying the premiums

associated with presorted varieties.

Economic Research Service, USDA 9

Table 4—India: Uncompensated own-price elasticities of demand

Commodity Rural Urban

I II III IV I II III IV

Rice -0.472 -0.360 -0.245 -0.133 -0.464 -0.402 -0.302 -0.205

Wheat -0.400 -0.317 -0.227 -0.140 -0.319 -0.312 -0.216 -0.143

Coarse cereals -0.389 -0.308 -0.214 -0.111 -0.451 -0.392 -0.281 -0.166

Pulses -0.775 -0.686 -0.545 -0.334 -0.784 -0.738 -0.597 -0.406

Milk -0.897 -0.838 -0.727 -0.510 -0.894 -0.870 -0.777 -0.605

Edible oil -0.832 -0.740 -0.600 -0.386 -0.798 -0.757 -0.622 -0.422

Vegetables -0.826 -0.747 -0.618 -0.415 -0.803 -0.762 -0.640 -0.475

Fruit -0.872 -0.805 -0.703 -0.520 -0.856 -0.845 -0.767 -0.640

Meat -0.962 -0.945 -0.912 -0.806 -0.950 -0.950 -0.917 -0.854

Sugar -0.686 -0.572 -0.424 -0.237 -0.681 -0.622 -0.477 -0.288

Other food -0.995 -0.990 -0.975 -0.942 -0.993 -0.990 -0.985 -0.957

Nonfood -1.320 -1.350 -1.300 -1.180 -1.310 -1.350 -1.310 -1.210

I: Very poor, II: Moderately poor, III: Non-poor lower, IV: Non-poor higher.

Note: Budget shares allocated to pulses by rural (urban) consumers in 1987-88 were 5% (5.1%), group I; 4.9% (4.7%), group II; 4.5% (4.3%),

group III; 3.7% (2.8%), group IV.

Source: Kumar.
Wholesale markets exist throughout India and channel

domestic and imported pulses to retailers. Delhi's Naya

Bazaar is the largest wholesale pulse market in India.

Other major wholesale markets are located in Mumbai

(Vashi), Kolkata (Postha), and Chennai (Govindappa

Naiken Street). The major wholesale markets comprise

numerous sellers—about 150 and 200 wholesale pulse

traders in Naya Bazaar and Vashi, respectively.

Wholesale trade is fragmented because each seller

operates independently. The markets do not maintain

formal sales records, but sellers typically keep tallies

of their own sales. Moreover, there is no official price

reporting or regulation at any of the markets. Unlike at

the retail level (particularly in urban areas), pulses are

generally not branded. However, wholesalers pass origin information on to buyers.

Numerous layers exist in the marketing chain between

farmers and consumers—as many as 6 to 7 levels,

including brokers, wholesalers, millers, and retailers.

However, the frequency of transactions is highest at

the wholesale level, since commodities change hands

several times with the assistance of brokers. 

Vertical integration, whether between importers and

wholesalers, producers and wholesalers, or wholesalers and retailers, is not evident. However, some

importers suggested that reducing the number of players in the marketing chain could be profitable. There

seems to be interest in integrating the import and

wholesale levels. Key factors preventing integration

within the wholesale level include historical fragmentation in business transactions due to multiple layers of

agents, the prevalence of multigenerational, familyowned businesses, and a lack of regional or national

firms. Efforts to vertically integrate would threaten

many wholesale businesses and replace longstanding

business practices based on experience and trust.

Another factor that may inhibit vertical integration is

the small-scale nature of pulse processing.

Quality Standards

Approximately 80 percent of traded pulses are classified as “fair to average quality” (FAQ), which is the

only universal grade in the Indian marketing system.

However, this grade is not fully standardized since

grading is done by visual inspection. The absence of

more stringent quality standards reflects the relatively

low incomes and high price sensitivity of most consumers. Some foreign suppliers and domestic wholesalers have created a “special quality” (SQ) category

to serve certain niches in the market. However, this

distinction is informal, subjective, and based on local

trading practices. 

Wholesale Prices

Domestic pulse prices often vary on a daily basis, with

most fluctuations attributable to market supply conditions rather than quality differences. Domestic prices

can also fluctuate widely on an annual or seasonal basis

due to changes in production. Despite the fragmented

market structure, regional markets in India appear to be

well integrated with respect to price. Pulse traders have

close ties to those in other areas, keeping abreast of relative prices and opportunities for arbitrage.

Among the domestic and imported pulses, kabuli

chickpeas, desi chickpeas, and mung beans tend to be

the costliest while dry peas (including yellow and

green) are the cheapest (fig. 6). Green peas previously

held a premium over yellow peas, but the latter are

now sometimes more expensive because of their substitutability for desi chickpeas and pigeon peas.

Domestic pulses typically fetch premiums over imported pulses of the same variety because of their pre10 Economic Research Service, USDA

Wholesale Marketing

Figure 6

India: Wholesale price ranges for pulses, 

June-July 2001

Rupees/kg.*

*As of July 2, 2001, the exchange rate was 47.18 rupees for 1 U.S. 

dollar. Board of Governors of the Federal Reserve System, Foreign 

Exchange Rates.

Source: Economic Research Service, USDA.

Yellow peas

Green peas

Lentils

Kidney beans

Pigeon peas

Black matpe

Mung beans

Desi chickpeas

Kabuli chickpeas

0 5 10 15 20 25 30 35 40 45 50
ferred taste, but the premiums appear to be small.

Price premiums associated with high quality and the

bagging and containerization of U.S. peas have made

them more expensive than peas from competing countries (such as Canada), reducing the demand for U.S.

peas.

Wholesale Marketing Margins

The revenues accruing to commission agents, brokers,

and wholesalers are based on a percentage of sales

value. Each agent typically charges a margin of 1-1.5

percent above transportation, handling, storage, and

processing costs. Although the reported margins are

small, significant revenue can be earned since inventories usually turn over 18-24 times annually. With many

actors in the marketing chain, there may be potential

to increase efficiency by integrating marketing

(import, wholesale, and retail) and processing activities. If the potential efficiency gains are large, future

changes in market structure could significantly affect

domestic producer and consumer prices, as well as the

competitiveness of imports with local varieties.

Economic Research Service, USDA 11
Many pulses in India are decorticated (hulls are

removed) and split. Mills process the pulses using a

multi-step procedure. First, they are cleaned to remove

foreign matter, such as stones. Second, the surfaces are

scratched so that they readily absorb moisture. Third,

the pulses are soaked in a water-vegetable oil mixture

to soften the outer layer. Fourth, decorticating

machines remove the hulls, and the pulses may be

split. Lastly, some millers polish the pulses to improve

their appearance. If the end product is flour, the decorticated pulses (such as desi chickpeas and black

matpe) are ground. The milling extraction rate is about

85 percent, but varies by variety. 

Operating machinery, bagging, and hauling are laborintensive activities in most plants. However, some

newer, more automated facilities do exist. Wholesale

price differences imply milling costs and margins of

about 3-4 rupees/kg. (or $62-83/ton). Milling charges

are levied on the amount delivered to the plant. Millers

discount their fees if they retain the byproducts, which

can be sold as feed.

The milling sector in India consists almost entirely of

small-scale enterprises, with plant machinery often

custom designed and built by the owners or local

mechanics. With a few exceptions, the mills are old.

However, they are reported to be technically and economically efficient at producing high-quality products.

Hence, there is no incentive from either a quality or

cost standpoint to import milled pulses. While a surplus of milling capacity was reported by millers, it is

not clear whether it exists throughout the year or

occurs only in off-peak periods (e.g., just prior to harvest).

Mills are typically independently operated. In addition,

vertical integration is not evident in the milling industry. In part, industry structure stems from regulations

that historically limited pulse processing (and most

other agricultural processing activities) to small-scale

firms. This industry structure may also be due to frequent weather-induced fluctuations in production,

which increase the cost and uncertainty of sourcing

raw materials.

12 Economic Research Service, USDA

Milling
Economic Research Service, USDA 13

Most consumers purchase pulses from small, independent retail establishments where they are sold loose

directly from gunnysacks supplied by wholesalers. The

amount purchased depends on a person's income.

Those who are poor may buy small amounts daily,

with the frequency of purchase declining as income

rises.3 In some cases, pulses are sorted and cleaned by

the retailer, thus commanding a premium. 

Prepackaged pulses in bags of 0.5-5 kilograms (kg.) are

typically available in urban areas at government stores as

well as middle- and high-end retail shops. Prepackaged

pulses are a small portion of total consumption—about

10-20 percent of urban consumption and a negligible

share of rural consumption. Prepackaged pulses are

cheapest at government-owned stores and the most

expensive at high-end supermarkets. Compared with

other segments of the marketing chain, retail-level margins are large, ranging from 30 percent at governmentowned stores to 50 percent in upscale supermarkets. 

Consumer packages are generally branded with retail

outlets' names. Unlike at the import and wholesale levels, origin information is not passed on to consumers.

There is currently no national or regional retail branding of pulses, although some companies reportedly are

investigating its potential.

3Some consumers in Ahmedabad preserve unused pulses, particularly pigeon peas, by soaking them in castor oil. 

Retail Marketing
With stagnant production and the recognition that

pulses are an important source of protein, India has

permitted unrestricted imports of pulses with low

duties for about 20 years—virtually the only food item

given such open access. Despite unrestricted imports

and low tariffs, imports have remained a relatively

small share of supply and consumption. In fact, except

for 2001 when imports increased sharply, India's pulse

imports have fluctuated without a strong upward trend

between 1985 and 2000 (fig. 7). Annual fluctuations in

imports (mostly average to lower quality) have not

been correlated with variations in domestic production

(usually FAQ), suggesting that international supplies

and prices may be as important as domestic market

conditions in affecting import levels.

Dry peas comprise the largest share of imports, with

the dry pea share rising sharply in 2001.4 Kabuli

chickpeas and pigeon peas also account for significant

shares of pulse imports. Imports of lentils, black

matpe, and desi chickpeas are relatively small, reflecting sizable domestic production of these varieties and

limited availability in the world market.

Data on trends in import prices are consistent with the

level and composition of India’s imports (fig. 8).

Import prices for green peas and dry peas as a whole

have been lower and more stable than for other varieties since the early 1990s, and particularly since

1998. Import prices for chickpeas, lentils, and dry

beans have, by contrast, been higher and more volatile

than those of dry peas, especially green peas. These

price trends likely reflect the emergence of growing

and more stable supplies of dry peas (including green

peas) in the world market, particularly from Canadian

and Australian exporters.

Supply Sources

India was the world's largest pulse importer during

1995-2001 (table 5). For many pulses, large shares of

imports—including desi chickpeas, pigeon peas, mung

beans, black matpe, and kidney beans—come from

Burma (fig. 9). Importers favor Burma because it

offers many varieties with qualities similar to those

produced in India as well as reasonable prices, low

freight rates, and relatively fast delivery. However,

erratic production and significant price fluctuations

can make transactions with that country difficult.

Canada and Australia are major suppliers of dry peas

and kabuli chickpeas to the Indian market, each supplying about one-third of India's pea imports during

the period 1995/96-1999/2000 (April/March years).

Historically, Canada has shipped green and yellow

peas, with the latter accounting for much of the

increase in Indian imports in 2001 (fig. 10). Australia

is a supplier of chickpeas and low-priced dun peas,

which are marketed primarily in Kolkata and eastern

India. In contrast, the U.S. share of pea imports is

14 Economic Research Service, USDA

Pulse Imports

4 Data on dry pea imports are available since 1987/88. The dry

bean category from 1980/81-1986/87 includes dry peas.

Figure 7

India: Pulse imports by type

1,000 tons

Years begin April 1. 

Source: FAO.

Dry beans Chickpeas Lentils Dry peas Other pulses

1980 82 84 86 88 90 92 94 96 98 2000

0

500

1,000

1,500

2,000

2,500
Economic Research Service, USDA 15

Figure 8

India: Pulse import unit values

rupees/ton

Dry peas

Lentils

All pulses Dry beans

Chickpeas

Green peas

Note: Prices are in 1981/82 rupees.

Sources: FAO and Government of India-f.

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Table 5—Major pulse1 importers, 1995-20012

Country 1995 1996 1997 1998 1999 2000 2001 Average

1,000 tons

Algeria 130 250 135 146 143 160 175 163

Belgium 675 661 538 601 591 572 451 584

Brazil 206 123 196 255 135 121 170 172

China 72 264 187 168 127 190 235 177

Cuba 139 124 181 155 219 120 151 156

Egypt 174 187 123 164 328 263 371 230

France 235 167 114 113 110 161 145 149

Germany 470 278 203 184 210 138 108 227

India 502 692 1,084 629 269 353 2,424 850

Italy 553 387 380 407 418 437 421 429

Japan 186 163 173 158 171 170 163 169

Mexico 46 173 130 245 168 133 177 153

Netherlands 776 613 451 594 585 330 228 511

Pakistan 235 285 112 188 194 372 371 251

Spain 830 589 636 784 777 850 768 748

United Kingdom 154 174 176 167 176 160 166 168

United States 111 111 130 121 202 211 213 157

World 7,559 7,012 7,087 7,091 7,105 7,216 9,399 7,496

1 Includes all types of dried (including split) leguminous vegetables, with the exception of vetches and lupins classified 

under SITC 081 (feedstuffs for animals).

2 Years beginning April 1.

Source: FAO.
16 Economic Research Service, USDA

Figure 9

India: Pulse imports by variety and origin, 1995/96-1999/2000 averge

Small chickpeas (Desi variety)

Burma

UAE

China

Australia

Tanzania

Other

70%

14%

6%

3%

2%

5%

Black matpe

Burma

Other

Thailand

Singapore

88%

9%

2%

1%

Green & yellow peas

Burma

United States

Hungary

Australia

Tanzania

Other

35%

31%

15%

6%

2%

2%

9%

Canada

Large chickpeas (Kabuli variety)

Turkey

Other

Iran

Canada

Burma

Australia

56%

17%

11%

8%

3%

5%

Pigeon peas

Burma

Other

Singapore

Malawi

96%

1%

1%

2%

Mung beans

Burma

Other

Singapore

China

89%

4%

2%

1%

3%

Australia

Lentils

36%

30%

17%

12%

2%

4%

Nepal

China

Turkey

Canada

Syria

Other

Kidney beans

Burma

Tanzania

Singapore

China

Other

66%

30%

1%

1%

2%

Source: Government of India-d.
Economic Research Service, USDA 17

small, due mainly to the additional $100-per-ton premium over Canadian product. This difference is

caused by quality-induced premiums as well as high

shipping costs resulting from bagging and containerization. While Indian importers are willing to spend an

additional 2-3 percent for the higher quality of U.S.

peas, they typically will not pay significantly more

than that amount.

Most kabuli chickpeas come from Mexico, Australia,

Canada, Turkey, and Iran. The largest size—12 millimeters in diameter—are imported from Mexico.

However, because the larger sizes are more costly, they

are reserved for special occasions. As a result, U.S.

exports of kabuli chickpeas to India are limited. As for

desi chickpeas, importers indicated that, historically,

there have been some problems with Canadian product, including high moisture content and inferior

milling quality. As a result, Australia's Tyson chickpea

variety is preferred because its uniform size is wellsuited for milling.

Nepal and Syria account for the largest shares of

Indian lentil imports, followed by Canada and Turkey.

Imports from Canada have shown significant growth in

recent years. Even though Canada has only been

exporting lentils to India since 1995/96, it has

achieved a 17-percent share of the import market. The

United States, on the other hand, has sporadically

shipped lentils to India since 1981, but has yet to gain

significant market share.

Import Destinations

The major import centers are Mumbai (60-70 percent

of total volume), Chennai (15-20 percent) and Kolkata

(15-20 percent). Trading and pricing activities occur in

Delhi and Mumbai. Mumbai and Kolkata are destinations for bulk shipments, while Delhi and Chennai are

container markets. Large importers prefer to ship commodities in bulk because of the lower per unit cost

compared with containerized shipments. The remaining importers transport pulses in containers. Bulk shipments can have as many as 10 buyers, with only the

largest importers individually contracting for an entire

vessel. Containerized shipping costs typically average

$15-$20 per ton higher than for bulk shipments. At the

time that the interviews were conducted, the differential was relatively high at $25 per ton. 

India does not have bulk handling facilities at ports

and inland markets, so bulk imports must be bagged

upon arrival. Bagging costs in India ($4-$5 per ton)

are far lower than the charges associated with containerized shipments. While containerized cargoes tend

to arrive in better condition than bulk shipments,

importers indicate that the gain in quality is not sufficient to justify the higher shipping costs.

Figure 10

India: Imports of peas from Australia and Canada

1,000 tons

1987/88 89/90 91/92 93/94 95/96 97/98 99/2000 2001

0

100

200

300

400

500

600

Canada Australia

Sources: For 1987/88 through 1999/00 (April-March marketing years), Government of India-d; For 2000- 2001 (calendar years), Global Trade 

Information Service, Inc. 

Note: Data for 1990/91 not available.

2000
Structure and Conduct in 

Pulse Importing

India has about 12-15 major pulse importers, with the

largest concentration located in Mumbai, followed by

Kolkata and Delhi. These players reportedly account

for 60-70 percent of total pulse imports. Importers rely

primarily on personal networks and contacts with brokers in supplying countries for market information,

obtaining price quotes, and making purchases. Many

traders remain with a given exporter when they are

able to obtain good market information, a guaranteed

supply, and first choice of quality.

Due to the limited incomes and price sensitivity of

most Indian consumers, a large percentage (about 80

percent) of imported pulses are rated as FAQ. While

quality is a consideration, importers are only willing to

pay small premiums for better quality. Traders look for

the lowest prices at acceptable qualities. The most

important quality attributes are cleanliness, uniform

size, color, and shape (important for milling). Lower

quality levels receive price discounts. 

Traders use foreign grading systems if they are importing from countries that utilize such standards. Purchases

of U.S. and Canadian pulses are usually graded No. 2 or

better and imports from Burma are primarily FAQ.

Indian importers prefer to have pulses sorted, graded,

and milled in India because the cost of such activities is

significantly lower in India than in the exporting countries. Another reason for not importing decorticated and

split pulses is that moisture from soaking (prior to

milling) may affect quality during shipping. Since pulses

are generally consumed quickly in India, moisture is not

a concern when pulses are milled domestically. 

Many importers use short-term credit, which is readily

available from Indian institutions at attractive interest

rates, to facilitate imports. Indian parastatal trading

companies, including the State Trading Corporation and

the Minerals and Metals Trading Corporation, are competitive sources of financing for Indian importers. The

U.S. Department of Agriculture's export credit guarantee programs, GSM-102 and GSM-103, are not attractive options for Indian importers. Interest rates on U.S.

credit are not significantly lower than those available

from domestic options. Moreover, use of U.S. credit

potentially exposes importers to exchange rate risk.

Importers in Delhi, Mumbai, and Chennai offer shortterm credit to their domestic buyers. This credit is usually for a short period (such as 10 days), but is not

always repaid by the deadline. Unlike in the other

cities, Kolkata importers do not offer credit and

require immediate cash payment.

Importers are not involved in domestic marketing.

They sell their product to wholesalers, either directly

or, more commonly, through brokers. Mumbai

importers report that there may be as many as 500

wholesale customers for a 5,000-ton shipment. Pulses

are typically marketed to wholesalers by quality 

attributes and origin. Wholesalers exhibit little loyalty

toward importers, and significant price competition

exists among importers when selling product to

domestic wholesalers.

Import Risks

Pulse importers face a number of risks that threaten

the profitability of their transactions. Many importers

forward sell their products before taking physical possession of them. Falling domestic prices prior to delivery provide incentive for buyers to renege on contracts.

Domestic market conditions, particularly variability in

domestic production and import activities, also affect

pulse prices. The volume of business and the prices

contracted by other importers serving the same market

are key factors affecting an importer's profitability.

Multiple impending shipments can flood the market

and lead to lower prices, increasing the probability of

default by domestic clients. Thus, traders closely monitor competitors' transactions but appear to operate

independently, with not much communication between

them except through their brokers. Indian importers

also face foreign exchange risk because transactions

with every country are conducted in U.S. dollars. 

Costs and Profitability of Imports

There are many costs associated with importing pulses

into India. Considering Canadian green peas in JuneJuly 2001, commodity costs were about $120/ton at

the foreign port (including inland transportation costs)

for No. 2 grade or better. Ocean freight rates ranged

from $50-$60/ton for bulk shipments to $80/ton for

loose peas in containers (there is typically only a

$15/ton difference between the two shipping methods).

Importers pay fees equal to 0.5 percent of the shipment value for insurance and export guarantees, which

insure payment to the exporting countries. 

Traders face numerous charges once the pulses reach

Indian ports (table 6). There are also incidental costs,

such as “speed money” to facilitate service at the port.

Moreover, penalty charges arise when containers are

18 Economic Research Service, USDA
Economic Research Service, USDA 19

kept for more than 14 days, or when a ship is docked

for more than 7 days. Importers try to sell product off

the boat in order to minimize handling, transportation,

and storage costs, but may choose to store pulses for

2-3 months if current market prices are unfavorable.

Although importers sometimes realize large margins

on cheap and well-timed purchases, average margins

are reported to be thin, with profits being made on volume. Interviews with several major importers suggest

margins of about 1 percent of total shipment value.

Pulse Import Policy

India has had a liberal policy toward pulse imports

during the past two decades. Pulse imports were

placed under Open General License in 1979, allowing

anyone to import pulses into India without approval or

restriction. According to Kelley, import duties steadily

declined during the late 1980s and 1990s. From 1988

to 1989, the tariff rate was 35 percent. The duty fell to

10 percent in 1989 and remained at that level through

1994. In 1995, the tariff was reduced to 5 percent and

was eventually eliminated in March 2000. A 5-percent

duty was reinstated in April 2001 and then raised to 10

percent in March 2002. 

No other major food item in India has had such a consistently open import regime over this period. In contrast, cereal imports were subject to quantitative

restrictions until the mid-1990s and, since then, have

been assigned high tariffs that prohibit trade. Imports

of vegetable oil, now India's largest agricultural

import, were restricted because of state trading until

1994, but since then have been freely traded subject to

tariffs that now range from 45-75 percent. India’s

World Trade Organization bound tariff rates are 50

percent for dry peas and 100 percent for all other pulse

varieties. Hence, there is considerable leeway for India

to legally raise tariffs on pulse imports.

One reason why pulse import policies have remained

relatively open may be the importance of pulses in the

Indian diet. Due to limited incomes, many consumers

rely on pulses as a source of protein. Given consumers'

price sensitivities, the government is concerned that

high tariffs would increase pulse prices and contribute

to declining consumption. Another reason for relatively unrestricted access is that pulse imports have never

reached levels that may threaten the livelihood of

domestic producers. It is unclear if the Indian government would raise tariff rates if imports surged.

Table 6—India: Selected charges paid by importers

at the Indian port, 2001

Selected charges Amount

Percent of shipment value

Import duty 10

Theft 0.5

Rupees/ton $/ton

Phytosanitary fee 300-400 6.25-8.33

Unloading of bulk shipment 500 10.41

Bagging 120-200 2.50-4.16

Warehouse storage (monthly) 50 1.04

Source: Economic Research Service, USDA.
The United States is not a major player in India's pulse

import market for several reasons. Most importantly,

U.S. pulses are relatively expensive compared with

those from other exporting countries. These high

prices are caused primarily by four factors. First, U.S.

pulses are positioned as high-quality commodities,

thus commanding price premiums (Price). India's

price-sensitive consumers are unwilling to pay significant premiums for U.S. quality, especially when lower

cost (and lower quality) pulses from other countries

are available. As a result, U.S. exports are limited to a

small, top-end segment of the Indian market. Second,

U.S. exporters bag and containerize shipments in order

to maintain high product quality. This process is more

costly than bulk shipping. Third, compared with

Canada, transportation costs are relatively high in the

United States. Canadian law caps the maximum revenues that railroads may earn on grain shipments, giving a transportation cost advantage to Canadian shippers. In the United States, long shipping distances

cause high trucking costs, particularly in the Northern

Great Plains. Rail rates to ports are also high (Price).

Fourth, from the mid-1990s through 2001, the high

valuation of the U.S. dollar relative to other currencies

helped make U.S. exports more expensive than those

from other countries. 

U.S. producers do not grow the pulses—including desi

chickpeas, pigeon peas, mung beans, and black

matpe—that are most common in India, which limits

market penetration in that country. Instead, the United

States grows and exports green peas, kabuli chickpeas,

and lentils to India. Although there is demand for

green peas in India because of their relatively low cost,

U.S. shipments are not price competitive, thus limiting

them to a niche market. In contrast, Canadian

exporters have been successful in producing and

exporting competitively priced, average quality yellow

and green peas. Canadian breeders are also developing

varieties of lentils, desi chickpeas, and other varieties

suited for the Indian market.

In addition, relatively small pulse acreage and production have made it difficult for the United States to be a

large, consistent supplier to India and a viable alternative

to Canada, Australia, or other established suppliers. To

some extent, the higher risks of planting non-program

crops have limited U.S. acreage, both in the traditional

production region of the Pacific Northwest and in the

Northern Great Plains, a relatively new area.

Keys to improving the U.S. position in the Indian

pulse market fall under two categories: expanding U.S.

supplies (both of current and new varieties) and

increasing price competitiveness. The 2002 Farm Act

provides dry pea, lentil, and small chickpea (those that

fall through a 20/64 grading screen) growers access to

marketing loan benefits, which reduce price risk and

help stabilize producer revenue when prices are low.

(Pulses are not eligible for direct payments or countercyclical payments.) Supporters expected the marketing

loan programs to provide incentives for production

growth, an essential component for expanding existing

markets and developing new ones.

For the 2002 crop year, national loan and repayment

rates were established for dry peas, lentils, and small

chickpeas (table 7). These rates reflected No. 1, foodgrade quality and were discounted for lower quality

pulses. Under this scenario, pulse acreage was not

expected to greatly expand. The incentive to plant

pulse crops would have been higher had the repayment

rates been based on feed-grade quality.

The loan and repayment rates have changed for pulse

crops grown in 2003. Regional loan rates have been

established for feed-grade dry peas because seasonaverage farm prices vary significantly across production

regions. Pea producers in the West (Idaho, Oregon,

Washington, Arizona, California, Nevada, New Mexico,

and Utah) will receive a higher loan rate than those in

other States (the average across all States is $6.33/cwt.).

Nationwide loan rates will be applied to No. 3 grade

lentils ($11.94/cwt.) and No. 3 grade small chickpeas

($7.56/cwt.) grown in the 2003 crop year.

Because the 2003 loan and repayment rates are based

on No. 3 grade quality, the positive effect on acreage

allocated to these crops is likely to be greater than previously expected when the loan and repayment rates

were based on food-grade quality. The incentive to grow

pulses will also continue to depend on the relative

returns from competing crops as well as the availability

of market outlets for pulse sales. Reduced price risk and

the agronomic advantages of pulses in rotations will

likely contribute to a rise in the acreage allocated to

these crops. However, even with marketing loan provi20 Economic Research Service, USDA

U.S. Competitiveness in the Indian Pulse Market
sions, planting flexibility restrictions are likely to limit

acreage of small chickpeas. Under the 2002 Farm Act,

planting flexibility provisions restrict the planting of

fruits and vegetables on base acres. Because small

chickpeas are classified as vegetables, little or no

growth in small chickpea acreage is expected.

Processors, exporters, and industry representatives

generally agree that if production of these commodities does expand, it will likely occur in the Northern

Great Plains rather than in the Pacific Northwest,

because of greater land availability, lower land costs,

and flatter terrain (Price). Producers in the Pacific

Northwest foresee the market for these pulse crops

becoming segmented, with the Pacific Northwest supplying premium grades and the Northern Great Plains

producing feed-quality and lower quality food-grade

pulses. Lower quality pulses would be comparable

with exports from other countries and more widely

accepted by Indian consumers. A dedicated supply of

lower grade pulses may also increase the price competitiveness of U.S. exports in the world market.

Domestic transportation infrastructure has been a constraint, particularly in the Northern Great Plains.

Transportation costs may hinder market expansion in

that region. Some U.S. pulses may be shipped through

Canada, which can transport commodities at significantly lower cost. Increased acreage could make bulk

shipping and the use of unit trains feasible, thus reducing shipping costs.

Factors other than the Farm Act provisions will come

into play when considering the future of the industry

and the potential for the United States to be a large

exporter. Given relatively small domestic food use,

other markets need to be developed and/or expanded in

order to accommodate increases in supply. The development of pulse-based food products and the use of

peas in feed rations may encourage greater production,

which could, in turn, increase the United States' competitive position in the export market.

Yellow peas may potentially be a profitable crop to

export given their low price and substitutability for desi

chickpeas in the Indian pulse market. Desi chickpeas

are another potential crop for producers in the Northern

Great Plains. Although a major component of Indian

pulse consumption, other suppliers have not yet been

successful in supplying significant volumes of desi

chickpeas to the Indian market. 

The Pardina lentil, a variety exclusive to the United

States, also may have large potential in India. Its most

attractive feature is that it is cheaper than most other

pulses. Pardina lentils are also small, so they cook

quickly. Production would have to increase in order to

supply Indian demand, since nearly all of the current

domestic production is exported to Spain. The one problem with the Pardina variety is that its inner flesh differs

in color (pink or yellow), so the milled or split product

is not uniform. Indian traders note that competitive pricing and the promotion of favorable characteristics may

counteract this drawback.

Economic Research Service, USDA 21

Table 7—U.S. 2002 loan rates for selected pulse crops

National loan rate Discounted loan rates for qualities less than U.S. No. 1

Grade No. 1 No. 2 No. 3 Sample

$/cwt

Dry peas 6.33 5.83 5.33 3.83

Lentils 11.94 11.19 10.69 7.94

Small Chickpeas 7.56 6.56 5.31 4.06

Source: Farm Service Agency, USDA.
India has the world's largest pulse sector, producing

and consuming many varieties. Since most Indian consumers have low incomes, they rely on pulses as a key

source of protein. Stagnant production and a growing

population have led to rising pulse prices and declining per capita consumption despite a liberal policy

regime towards pulse imports. Pulse production

remains unattractive to Indian farmers because of the

relatively low productivity of pulses, combined with

more favorable government price supports and procurement policies for wheat and rice.

The explanation for why the Indian market has witnessed declining per capita consumption of pulses

despite rising incomes and a liberal import policy likely hinges on several factors. First, domestic supplies

have not risen significantly over time due the use of

non-irrigated land, a lack of varietal improvements,

and government policies that encourage wheat and rice

production. Second, imports have remained a small

share of supplies. This may be due to constraints in

world supplies of low-priced pulses that could be

exported to India. Also, pulse-exporting countries

have tended to limit their response to opportunities in

the Indian market, either because of resource constraints in expanding output or risks associated with

producing and marketing relatively minor crops for

new markets (as in the United States). Third, increases in pulse prices may have exceeded growth in

incomes, leading to reduced demand for pulses. 

Field research conducted in June-July 2001 reveals

that Indian consumers are responsive to both income

and price in pulse purchases. Income elasticities of

demand for pulses are positive among high- and lowincome and rural and urban groups, indicating a widespread preference to devote new income to pulse consumption. While quality attributes are evaluated when

making purchase decisions, price is the dominant factor. Price premiums for higher quality tend to be

small, with transactions heavily weighted toward average and lower quality product. Moreover, consumers

switch among quality levels and varieties as well as

between other foods (such as cereals and vegetables),

based on changes in relative prices. While qualitybased niche markets do exist, marketing strategies

should focus on average or lower quality and competitive pricing in order to make significant inroads into

the Indian market.

The marketing channel between producers and consumers comprises several different levels. These levels

show little evidence of vertical integration. Importers,

millers, and wholesalers operate on small margins, with

earnings being made with high inventory turnover. In

contrast, retail margins are significant, ranging from 

30-50 percent. Most pulses are sold unbranded to consumers and in loose form, although store-branded consumer packages are becoming commonplace in urban

areas. Origin information for imported pulses may be

preserved at the import and wholesale level, but disappears at the retail level. There is no national or regional

branding of pulses. Some firms are contemplating vertical integration and national branding—strategies that

could effectively reduce marketing costs and retail

prices as well as boost market share.

India imports pulses from many countries, including traditional varieties from Burma and relatively cheap, nontraditional varieties, such as green and yellow peas from

Canada and dun peas from Australia. The United States

is not a significant player in the Indian market because

its exports are not price competitive with those from

other countries. Quality-induced price premiums, combined with high shipping costs associated with bagging

and containerization, make U.S. pulses relatively expensive. Other factors that limit U.S. market share in India

are the small volume of pulses produced in the United

States and, at least in the late 1990s, the strong value of

the U.S. dollar relative to the rupee.

22 Economic Research Service, USDA

Conclusions
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Ganguly, S. “From the Bengal Famine to the Green

Revolution.” http://www.indiaonestop.com/

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Global Trade Information Service, Inc. “World Trade

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Govindan, A. “Shopping for Pulses.” India Grain and

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Economic Research Service, USDA 23

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