Centre puts sugar in restricted category to tame inflation

New Delhi: With the intention to tame the soaring domestic inflation, the Central government has announced curbs on sugar export effective from June 1.

The latest move comes days after banning the export of wheat in order to control rising inflation and to ensure availability in the domestic market.

India's retail inflation has been above RBI's tolerance band for the fourth straight month in April, and is likely to continue in the coming months too.

The upper limit for sugar exports has been kept at 10 million tonnes for the marketing season ending October 31, the government said late on Tuesday night.

Notably, India is the second largest exporter of the sweetener.

Besides, on Tuesday the Centre allowed the import of a quantity of 20 lakh tonnes each of crude soyabean oil and crude sunflower oil per year for a period of two years at zero customs duty and Agricultural Infrastructure and Development Cess.

It is important to note that India fulfills a major portion of its edible oil requirements through imports.

The ongoing war in Ukraine has led to a short supply of sunflower oil as both the countries involved in the war are major producers of sunflower oil.

Further, during the weekend the government reduced excise duties on petrol and diesel, reduced import duties on some raw materials needed for steel production and announced subsidies for Ujjwala cooking gas beneficiaries.

Meanwhile, the International Monetary Fund (IMF) chief Kristalina Georgieva urged India to reconsider its decision on wheat export ban in the wake of a global shortage caused by the Russia-Ukraine conflict.

Georgieva expressed concerns that there are chances of other countries putting restrictions on wheat export which in effect is expected to worsen the global supply.

She said that the restrictions on wheat in the global level not only create a risk of hunger but it involves a risk that could trigger a social unrest.

Apart from some changes in economic policy, the government has reduced tax on petrol, diesel, coking coal, and raw materials for making steel over the weekend to tame the inflationary pressure.

Retail inflation rate had surged to an eight-year high of 7.79 per cent in April, while wholesale inflation has been in double digits for 13 consecutive months. Retail edible oil inflation remained at 20-35 per cent level all through 2021, with the latest print for inflation rate for oils and fats recorded at 17.28 per cent for April.

With IANS inputs