News / Asia

    India Cuts Import Duty on Onions to Fight Inflation

    An Indian worker sits on sacks of onions at a wholesale market on the outskirts of Jammu, Dec. 22, 2010
    An Indian worker sits on sacks of onions at a wholesale market on the outskirts of Jammu, Dec. 22, 2010

    India has eliminated an import duty on onions in another effort to calm public anger about a sharp rise in food prices.

    India's finance minister, Ashok Chawla announced the move Wednesday, a day after Prime Minister Manmohan Singh expressed "deep concern" about rising prices. The Indian government had already banned the export of onions until January 15.

    Onions are an essential ingredient for almost all Indian dishes.  Onion prices have more than doubled in the past week due to shortages caused by unusually heavy rains in India's western growing areas.  Officials say hoarding and speculation have driven prices higher.

    An Indian vendor receives money from a customer as he sells onions in Bhubaneswar.
    An Indian vendor receives money from a customer as he sells onions in Bhubaneswar.

    India has begun importing onions from Pakistan, which is usually an export destination for Indian onions.

    The price of onions can also have important political implications in India.

    The 1998, the incumbent Bharatiya Janata Party was said to have lost control of the capital, New Delhi, in state elections due to a sharp surge in onion prices just before the polls.

    Some information for this report was provided by AFP.

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