Dec. 1 (Bloomberg) -- China and India lifted controls targeting prices of products from vegetable oil to natural rubber after inflation eased in the world’s fastest-growing major economies.

China today stopped requiring companies to seek approval for some food-price increases, the government said. India dropped a ban on futures trading in natural rubber, soybean oil, potatoes and chickpeas, the consumer affairs ministry said.

Easing inflation gives policy makers more leeway for efforts to sustain growth in the world’s fastest-growing major economies. China last week reduced borrowing costs by the most in 11 years, less than three weeks after announcing a $586 billion stimulus package.

“For China, the main focus of the government is to boost economic growth and prevent deflation,” said Wang Qing, chief China economist at Morgan Stanley in Hong Kong.

In India, Prime Minister Manmohan Singh dropped a seven- month ban on futures trading in natural rubber, soybean oil, potatoes and chickpeas.

“Inflation has clearly taken a backseat,” said Harish Galipelli, head of research at Karvy Comtrade Ltd. in Hyderabad, India.

Lifting the restriction is the first policy shift by Singh since he took over the government’s top economic job yesterday in the wake of last week’s terror attacks. Inflation has halved from a 16-year high in August because of a plunge in commodity prices.

‘No Justification’

“Commodity prices have fallen and there’s no justification to continue with the ban,” said Galipelli, of Karvy Comtrade. “The government, the regulator and the public are convinced that futures trading did not fuel price increases and it was more of a global phenomenon.”

In China, companies making grains, vegetable oil, pork, beef, mutton, dairy products, eggs and other food items no longer need permission for price increases, the National Development and Reform Commission said today on its Web site.

Controls were imposed in January to ease “social tension,” the government said then. Inflation has more than halved from a 12-year high in February.

India’s economy grew 7.6 percent in the third quarter, the slowest pace since 2004. China’s 9 percent growth was the weakest in more than five years.

To contact the reporter on this story: Nipa Piboontanasawat in Hong Kong at npiboontanas@bloomberg.net; Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net.

Last Updated: December 1, 2008 04:56 EST