An investigation by the Indian Income Tax Department into a 2015 pulse price rise has brought to light allegations of cartel like behaviour in India's pulse industry.

Initially, the rising cost of chickpeas and lentils was seen as a result of poor weather conditions in India, following a bad monsoon season.

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Pulse trader and director at Pulse Australia, Sanjiv Dubey said after the monsoons subsided the prices continued to grow.

"Wholesale consumer index has actually fallen in 2015 and pulses is the only one spiked so much high and that is how the whole investigation started," he said.

"What the Indian government has (allegedly) found is that collectively these companies have tried to take advantage of the situation of short supply of pulses in India."

At the time the Indian government acted quickly cracking down on hoarders and increasing subsidies to encourage more farmers to grow pulses.

News outlet India Today investigated the pulse price hike, calling it the "Great Indian Dal Scam" and accused traders of manipulating the market.

At the end of 2015 the Income Tax Department conducted searches on pulse traders and commodity businesses across multiple Indian cities.

Mr Dubey said after the raids the story went cold.

"Now we learn it went quiet because they [the Tax Department] were trying to formulate their own assessment of what went wrong," he said.

Documents obtained by Indian website Economic and Political Weekly revealed the full extent of the tax department's investigation in a document comprising of over 2,000 pages.

The article found investigations by the Income Tax department indicated that the sudden spike in the prices of particular pulses in 2015 was a consequence of the formation of international and Indian cartels of traders.

Allegations of coordinated collusive activity by trading companies, including hoarding and tax evasion are levelled at three multinational trading companies, alongside domestic Indian companies.

The article claimed that multi-national company Glencore group was at the centre of the cartelisation of the pulse industry.

Glencore Group has a large hold on the Australian pulse market and in a statement to the ABC they denied the allegations.

"The price rise or fluctuations have been attributed to the retail sector (not importers) and other factors including successive droughts, and supply and demand changes. "Glencore rejects any allegation that it was involved in 'cartel-like' behaviour or contributed to a 'dal crisis' in India. Glencore has cooperated fully with all relevant authorities and continues to be open and transparent about our business in India. "The price rise was only in two pulses — tur (arhar) and urad — Glencore's imports of these commodities are very low. "Red lentils (masoor) and yellow peas are the main pulses traded by Glencore and these saw no price rise."

Whatever the allegations, trader Sanjiv Dubey said the Australian pulse industry has benefited from the price rise.

Chickpea prices continue to be in strong demand for Australian growers. ( ABC Rural: Brett Worthington )

"It has been absolutely a fantastic two years for the growers and for the Australian pulse industry," he said.

"All these things about the cartel and money laundering has come up but it has cemented the position of pulses in Australian grain industry."

Rob McRea, a pulse grower from Wallup in Western Victoria, said with the current prices of pulses like chickpeas — he could not grow enough.

"We haven't got enough of them. We'd like a lot more" he said.

"There obviously a very valuable commodity at the moment."

But Sanjiv Dubey is concerned that, if Indian importers are caught up in a long legal battle, the Australian export market could suffer.

"There would be a void in large volume buying from India, thus a concern for Australian pulse exports," he said.