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Desperate govt okays free import of onions news
22 December 2010

In yet another desperate attempt to curb soaring onion prices, the government has abolished import taxes on the vegetable, a staple in most Indian diets.

The customs duty on onions has been cut from 5 per cent to zero, finance secretary Ashok Chawla told reporters in New Delhi.

The retail price of onions has risen to an eye-watering Rs85 per kg in some markets, from around Rs35 last week. The spike has been blamed on unusually heavy rains in growing areas, as well as hoarding by speculators.

On Monday, the government banned exports of onion until 15 January. The ban has eased wholesale prices, but this is yet to trickle down to the retail level (See: Export ban succeeds in curbing onion prices)

The country has also begun importing onions from Pakistan to ease the shortfall. Customs officials said on Monday that 13 small trucks laden with 200 bags of onions each had come to India, whereas about 40 trucks came on Tuesday.

Compared to the exorbitant domestic prices of the commodity, the price of onions imported from Pakistan is just Rs18-20 per kg.

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Desperate govt okays free import of onions