Indian Government removes restrictions on potato imports from Bhutan

Retail inflation in potatoes surged from 6.8% in April this year to 11.1% in May, the State Bank of India (SBI) had noted

With retail potato prices rising sharply over April and May, the government has decided to permit the import of Potatoes from Bhutan without any license up to June 30, 2022, as per a notification issued late on Monday by the Commerce and Industry Ministry.

Last October, as potato prices crossed ₹40 (~0.54 USD) per kilogram at the retail level, similar relaxations were offered for potato imports, which are usually restricted, from Bhutan till January 31 this year.

According to a SBI Research note, inflation in potatoes was one of the biggest contributors to the surge in food inflation in May when overall retail inflation quickened to a six-month high of 6.3%, beyond the upper tolerance threshold of the central bank’s inflation targeting framework.

Retail inflation in potatoes surged from 6.8% in April this year to 11.1% in May, SBI had noted. At the wholesale level, potato price inflation had been falling for three months in a row till March this year.

Cabbage and small millets were the only other common food items to record higher inflation in May on a year-on-year basis, though pickles, grapes, honey, and garlic, among others saw sharper spikes than potatoes in May as compared to their prevailing price levels in April.

Soumya Kanti Ghosh, SBI’s group chief economic adviser in a note on consumer price inflation on June 16:
 

"The increase in inflation in May has been persistent and across the board. Protein items, cereals and even vegetables have all witnessed increase in prices."