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Tackling Food Inflation: Is restricting exports and imposing stocking limits the optimal policy?

Author

Listed:
  • Ashok Gulati

    (Indian Council for Research on International Economic Relations (ICRIER))

  • Raya Das

    (Indian Council for Research on International Economic Relations (ICRIER))

  • Sanchit Gupta
  • Manish Kumar Prasad

Abstract

India faces a challenging macroeconomic scenario as retail inflation, measured by the year-on-year Consumer Price Index (CPI), persists above the Reserve Bank of India's upper tolerance limit, reaching 6.83 percent in August 2023. This surge, primarily driven by soaring food prices. The Government of India (GOI) has implemented a series of measures, including export ban on non-basmati white rice, stocking limits on wheat, and export duties on onion, parboiled rice often seen as abrupt and reactionary and impact farmers' income. Our study estimates that these market restrictive policy measures have taken a toll on our farmers, slashing their earnings by a staggering Rs.39,829 crores. This policy brief advocates for a more rational and dependable trade policy that balances the interests of producers and consumers while containing food inflation.

Suggested Citation

  • Ashok Gulati & Raya Das & Sanchit Gupta & Manish Kumar Prasad, 2023. "Tackling Food Inflation: Is restricting exports and imposing stocking limits the optimal policy?," Indian Council for Research on International Economic Relations (ICRIER) Policy Paper 15, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    • Handle: RePEc:bdc:ppaper:15
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    Keywords

    Food Inflation; retail inflation; Basmati; trade policy; food prices; icrier;
    All these keywords.

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