India has raised the stakes in its trade war for chick peas with a new 60% tariff

An Indian customer buys a chickpea snack from a roadside stall in New Delhi. (Anna Zieminski / AFP / Getty Images)
  • The new tariff aims to restrict the flow of imports from producers in Australia Canada.
  • It marks the third tariff hike in chick pea imports in the last three months.
  • Australia exported more than $1 billion worth of chick peas to India in the 2016/17 financial year.

With the market’s recent focus on fears of a pending trade war between the US and China, India has announced a tariff of its own with a new 60% import tax on chick peas.

The move — announced at the start of this month, and effective immediately — is intended to restrict the flow of cheap imports from Australia and Canada.

It marks the third increase in the last three months, after an initial 30% chick pea tariff implemented in December was increased to 40% in February.

And Australian farmers won’t be immune to the latest hikes. According to the ABC, total chick pea exports to India in the 2016/17 financial year amounted to $1.14 billion.

It’s not the only agricultural tariff to be introduced by India’s government in recent months, following the introduction of a 50% import tax on yellow peas in November.

SBS reports that Australia’s Agriculture Minister David Littleproud said he’s disappointed in the latest decision.

“I’ve written to the minister in India asking them for some explanation,” Littleproud said.

“The important thing to understand now is there are no boats on the water with chickpeas on them,” he said.

That would have added to the sting for any Australian producers who had already paid for packing and shipping costs, only to be hit with an increased tariff upon their arrival.

“Our producers haven’t been as impacted as badly as they could have.”

Littleproud visited India in January and said he was confident that the two nations can continue to work towards a free-trade deal, which would remove the threat of further tariffs.

For now, Australian chick pea producers have been forced to add an extra 60% into their cost forecasts for Indian export shipments in the span of just three months.