Consumer Price Index (CPI) data from India shows that retail inflation decreased to 6.77% in October from 7%.
According to the Union finance ministry, who retracted its May 22 decision to increase their exports, the government removed export levies imposed six months ago on steel and its components on Saturday after their domestic rates stabilised, allaying previous fears about inflation.
“The central government has restored the status quo as was prevailing prior to 22nd May 2022 and withdrawn the export duty on iron ores lumps & fines below 58% Fe content, iron ore pellets and the specified steel products including pig iron. The import duty concessions on anthracite/PCI coal, coking coal, coke & semi-coke and ferronickel have also been withdrawn,” the ministry said in a statement on Saturday.
The decision to remove export duties on iron ore and steel products is influenced by two factors: the export curb was one of the main reasons for a decline in exports in October of this year, according to two officials familiar with the development who asked to remain anonymous. Domestic prices of these product groups are no longer responsible for high inflation because they are sufficiently available at reasonable rates. (Also read: Why is Bisleri trending on Twitter? Know its connection with jailed AAP leader Satyendra Jain)
Retail inflation in India, as determined by the Consumer Price Index (CPI), dropped below 7% in October, coming in at 6.77%, which is much lower than the reading from September (7.41%) but still well above the Reserve Bank of India's maximum tolerance range of 6%. India's exports of goods fell 16.65% to $29.78 billion in October, primarily as a result of adverse global economic conditions. Iron ore exports alone experienced a 72% decrease from April to October 2022, falling to $2.4 billion from $666 million. On the other hand, compared to the same period last year, imports of iron and steel increased by over 31% and totalled almost $12 billion from April through October 2022.
“Since iron ore is a basic input for many industries across the countries, so, at this juncture, this is a great opportunity to enhance our exports trajectory as there are no supply constraints in the domestic market,” said Saket Dalmia, president, PHD Chamber of Commerce and Industry.
The Engineering Export Promotion Council (EEPC) hoped that the removal of the export tax on products made of iron ore and steel would prevent prices from rising. “The domestic prices, however, should not increase further for benefit of MSME [micro, small and medium enterprises] users,” it said in a statement. The move will boost engineering goods exports and contain the downward trend seen in steel exports, it added.
“In the last few months, volume data had also indicated significant year-on-year decline in exports of major stainless steel and alloy steel items which were manufactured by export-oriented MSMEs,” it said. During October, engineering exports fell 21% primarily due to decline in shipments of steel and its products, it added.
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