Soaring Indian Onion Prices May Hurt Modi More Than Tomatoes
- India slaps 40% duty on onion exports, will subsidize sales
- Stable food prices crucial for Modi’s bid to win third term
India has imposed a 40% export tax on onions and plans to sell them locally at subsidized rates.
Photographer: Anindito Mukherjee/BloombergRising onion prices in India pose a greater risk to Prime Minister Narendra Modi’s government than a recent spike of 700% in tomatoes, forcing authorities to take fresh steps to curb food inflation before key polls.
India has imposed a 40% export tax on onions and plans to sell them locally at subsidized rates. The vegetable stands alongside tomatoes and potatoes as part of a trio of crops so crucial to Indian diets that past price spikes due to crop losses have prevented some ruling parties from returning to power. Consumers are more sensitive to onions — a vegetable that’s hard to be replaced with any other commodity in many local cuisines — than to tomatoes and potatoes.