Updated on Nov 20, 2022 04:52 AM IST
India’s retail inflation, as measured by the Consumer Price Index (CPI), fell below 7% at 6.77% in October, which is significantly low compared to the September print of 7.41%, but still far away from the Reserve Bank of India’s upper tolerance limit of 6%.
ByRajeev Jayaswal, Hindustan Times, New Delhi
The government on Saturday withdrew export duties imposed six months ago on steel and its inputs after their domestic rates sobered, allaying previous inflationary concerns, according to the Union finance ministry, which withdrew its May 22 decision to boost their exports.
“The central government has restored the status quo as was prevailing prior to 22nd May, 2022 and withdrawn the export duty on iron ores lumps & fines below 58% Fe content, iron ore pellets and the specified steel products including pig iron. The import duty concessions on anthracite/PCI coal, coking coal, coke & semi coke and ferronickel have also been withdrawn,” the ministry said in a statement on Saturday.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 withdraw exports duty on iron ore and steel items is influenced by two factors – domestic prices of these product groups no longer responsible for high inflation as they are sufficiently available at reasonable rates, and the export curb has been one of the major factors for contraction of exports in October this year, two officials aware of the development said, asking not to be named.
India’s retail inflation, as measured by the Consumer Price Index (CPI), fell below 7% at 6.77% in October, which is significantly low compared to the September print of 7.41%, but still far away from the Reserve Bank of India’s upper tolerance limit of 6%. In October, India’s merchandise exports declined 16.65% to $29.78 billion, mainly due to global headwinds. Exports of iron ore alone saw over 72% decline in April-October 2022 at $2.4 billion compared to $666 million in April-October 2021. On the other hand, imports of iron and steel surged over 31% in April-October 2022 at around $12 billion against $9.2 billion in the same period previous year.
HT on September 19 reported that the government was considering reducing duties on exports of iron ore and steel products as higher levies on them had been adversely impacting the country’s mercantile exports. The finance ministry on May 22 imposed export duties ranging from 15% to 45% on inputs for iron and steel in a move to increase their availability for the domestic manufacturers.
“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 withdrawal of export duty on iron ore and steel products does not lead to any price hike. “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.
Subscribe to our best newsletters