New Delhi: India has announced a 40 percent custom duty on the export of onions, a development that comes as rising prices of the bulb have sparked off fears of a further rise in retail inflation.
In a notification Saturday, the ministry of finance said that it had imposed the duty until 31 December. While prices for vegetables are surging across the board, data from the Department of Consumer Affairs shows that the cost of tomatoes, onions, and potatoes have seen the highest spike since the beginning of May.
According to the data, the prices of these vegetables increased by 87.1 percent month-on-month in July, compared to 16 percent in June.
The price of onions increased from Rs 22.6 per kg to Rs 28.1 per kg between 1 May to 13 August — an increase of a little more than 24 percent.
This is not the government’s first attempt at curbing the surge in onion prices. On 11 August, it had announced that it would release onions for its buffer stock in targeted regions to stable prices until the new crop arrives in October.
At that time, the consumer affairs ministry had said in a statement that the stock will be released in areas where retail prices are over the all-India average and where the increase in prices are over the threshold level.
Government data released earlier this month shows that wholesale inflation in food articles, as measured in the Wholesale Price Index (WPI) reached 14.25 percent in July while retail food inflation indicated by the Consumer Price Index (CPI) rose to 10.6 per cent in the month of July.
In a bid to control inflation, the government had in July banned the export of non-basmati white rice. A ban on sugar and wheat exports was already in place at that time.
(Edited by Uttara Ramaswamy)