Economists have said that India is experiencing inflation due to imports from foreign countries.
The cost of domestic production increases due to the increase in the price of imported crude oil and raw materials. This also increases the price of locally produced goods. Import inflation is the main reason behind the depreciation of the Indian rupee.
It is because we have to pay more for imports that the value of the rupee falls badly in foreign transactions. In yesterday’s trade, the Indian rupee fell by 22 paise to 79.48 against the US dollar at an all-time high.
Rajini Tagore, Senior Economic Adviser, RBI Bank said,
“Currently we are certainly facing import inflation. Mostly due to high cost of imported goods and consequent rise in input prices, prices of all major raw materials including imported food, fuel are doubling. This is adding to the pressure on the Indian rupee,” he said.
This is what he said.
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India’s retail inflation eased to 7.04 percent in June from 7.79 percent in April. Meanwhile, retail inflation for agriculture and rural labor rose to 6.67 per cent and 7 per cent respectively in May due to higher food prices.
“Risk of imported inflation, rupee depreciates to historic lows. As global commodity prices continue to rise, rupee depreciation will further increase commodity prices in the domestic economy. However, RBI is taking effective steps to ensure rupee stability,” CII said. President Pradeep Multani said.
Meanwhile, headline inflation in India rose to 15.88 percent in May. Headline inflation was 13.11 percent during the same period last year. Inflation calculated since April 2013, May’s total price inflation was the highest at 15.88 percent.
“India is facing import inflation, especially for crude oil and some commodities like cooking oil, coal and iron ore,” said Prasenjit K Basu, chief economist at ICICI Securities.
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