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Onion Tax In India Has Brought Tears To Householders’ Eyes

Mary Swire, Tax-News.com, Hong Kong

27 December 2010


Tax on onion imports into India has been scrapped following anger across the country about the rising cost of this basic vegetable. The price of onions has rocketed from 35 rupees to 80 rupees a kilogram, turning an ingredient used in virtually every Indian dish into an unaffordable luxury for India's poor. It has also been suggested that traders have been hoarding onions and so driving up prices.

The move comes after Prime Minister Manmohan Singh expressed “deep concern” over the cost of onions doubling and called for steps to lower the price of what should be a basic item. “The government is monitoring the onion price situation on an almost hourly basis," said consumer affairs secretary Rajiv Agrawal.

The government, which has been battling to curb food inflation of nearly 10%, has warned prices will stay high for several weeks due to unseasonal rains in western India's onion-growing region. Onions are being trucked in from neighbouring Pakistan, where they cost a fifth of the Indian price, in a bid to lower prices.

TAGS: Pakistan | tax | India | trade | inflation

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