New Delhi: India slapped export taxes on basmati rice and some steel products and cut more duties on Tuesday, as the finance minister unveiled a series of new moves to boost supplies of key commodities and help moderate inflation. But P Chidambaram told parliament India faced no fear of food shortages with bumper harvests of both rice and wheat expected this year.

On Tuesday, the central bank tightened cash conditions to combat rising inflation and forecast economic growth of 8-8.5% in the fiscal year to March 2009, slightly slower than a year ago.

India’s move to further squeeze rice exports came a day after the Philippines asked the World Bank to persuade exporting nations to lift shipment curbs that have threatened the food security of importing countries.

But worries over rising prices are mounting in India, where annual wholesale price inflation is at its highest in more than three years. The central bank’s chief said on Tuesday the next few weeks would not see a significant decline in the rate.

Chidambaram said the government would levy an export tax of Rs 8,000 ($200) per tonne of basmati rice, but would bring down the minimum export price to $1,000 per tonne from $1,200. India has already banned exports of non-basmati rice. Global rice prices have tripled this year on fears of tight supplies after leading producers such as India and Vietnam curbed exports to ensure their own supplies as other staples jumped.

“The margins of exporters of this item have been rising as a result of buoyancy in international prices,” Chidambaram said.

But US rice futures fell over 2.5% on Tuesday, deepening their retreat from last week’s record high as top exporter Thailand said it would release government stocks, and traders looked ahead to Asian harvests.

Chidambaram said steel and steel products had a key role in the overall increase in prices, contributing about 21.3% of the current inflation.

“There is a case of disincentivising the export of steel,” he said during a parliament debate on the budget for 2008-09.

“The objective of containing domestic prices will not be achieved unless we augment the domestic supplies and availability of intermediates and finished products,” he said.

The export duty would vary from 5% on galvanised steel to 15% on products like hotrolled coils. Meanwhile, basic customs duty would be slashed to zero from 5% for pig iron and products such as sponge iron, granules, ingots, semi-finished products, HR and CR coils.

Source : DNA