Govt asks traders to speed up pulses import from Myanmar using forex | Latest News India

India and Myanmar have set up a new forex payment mechanism via the Punjab National Bank to ease cross-border movement of goods, especially pulses, which Indian importers are being encouraged to use to avoid logjams, a top official said.

Consumer affairs secretary Nidhi Khare last week reviewed trade arrangements between the two countries to speed up import of pulses from the conflict-ridden country, which is a major supplier of pigeon pea (tur) and black gram (urad) to India.

Last year, the government found that importers of pigeon pea and black gram were hoarding their purchases in Myanmar by not bringing them to India immediately. This had created artificial scarcity and stoked prices.

The consumer affairs ministry cracked down on hoarding by asking stockholding entities like supermarkets, millers and wholesalers to declare pulses inventories held by them on a weekly basis effective April 15.

The top bureaucrat in the consumer affairs virtually discussed with the Indian mission in Yangon issues related to pulses imports from Myanmar. Revised exchange rates had created a hurdle in seamless payments while stocks of pulses held by Indian importers in Myanmar have in the past created artificial scarcity.

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The Indian mission apprised Khare that a rupee/kyat settlement mechanism had been operationalised in January to ease trade. The Central Bank of Myanmar has released guidelines for payment procedures under a special rupee vostro account. A vostro account is one in which a foreign bank provides financial services on behalf of a domestic bank, making transactions easier.

Retail inflation in pulses remains high, although it slowed to 17.71% in March compared to a rise of 18.9% in February, according to official data. Holding the repurchase rate steady, the Reserve Bank of India’s monetary policy committee on April 6 highlighted how food price pressures “have been interrupting the ongoing disinflation process, posing challenges for the final descent of inflation to the target of 4%”.

India’s output of pulses dipped to 23.4 million tonne in 2023-24 from 26.1 million tonne a year ago, the agriculture ministry estimated.

“The new mechanism will apply for both sea and border trade and for trade in goods as well as services. Adoption of the mechanism by traders will reduce costs associated with currency conversions and eliminate complexities related to exchange rates by eliminating the need for multiple currency conversations,” an official said, declining to be named.

The consumer affairs ministry is undertaking a campaign to disseminate information about the new payment mechanisms among pulses importers, who can now use rupee/kyat direct payment system using the vostro account through the Punjab National Bank.

To keep prices stable, the Centre has put in a mechanism to closely monitor stock disclosures of pulses importers, traders and millers to check hoarding, which could stoke prices.