India to import tomatoes from Nepal amid surge in price, says Nirmala Sitharaman

Struggling to control tomato prices, which have skyrocketed by over 400% in the last couple of months, the central government on Thursday announced that it has initiated imports of tomatoes from Nepal.

The first lot of tomatoes from Nepal is likely to reach Varanasi, Lucknow and Kanpur – major cities of Uttar Pradesh – by Friday, Union Finance Minister Nirmala Sitharaman said in Lok Sabha on Thursday.

The minister announced that the government has decided to sell tomatoes in Delhi NCR at a subsidised rate of Rs 70 per kg on the weekend. “NCCF (National Cooperative Consumers’ Federation of India Limited) is planning a mega-sale of tomatoes in Delhi-NCR at a subsidised rate of Rs 70 per kg this weekend and covering all nooks and corners of Delhi,” she said.

She said the central government has booked tomatoes from Kolar mandi in Karnataka at a rate of Rs 85 per kg that will be supplied to Delhi NCR.

Sitharaman claimed that tomatoes are supplied at subsidised rates also in Bihar, West Bengal, Uttar Pradesh and Rajasthan. “As on date, NCCF has distributed 8,84,612 kgs of tomatoes,” she said.

“Procuring of tomatoes from tomato growing regions of Maharashtra and Andhra Pradesh and also Karnataka and distribution of these through cooperative societies like NCCF, NAFED are all happening,” Sitharaman said while participating in the debate on the no-confidence motion.

The finance minister said the government has removed import restrictions in order to ease the supply of tomatoes from Nepal.

According to a report released by CRISIL earlier this week, retail price of tomato surged by 233% to Rs 110 per kg in July from Rs 33 in the previous month. The prices have soared further in August surging past Rs 200 per kg. In the wholesale market, according to a Reuters report, tomato prices have soared 1400% in the past three months.

Surge in the price of tomatoes and other food items have led to rise in inflationary pressure. Consumer Price Index-based inflation, which the RBI monitors for its policy action, rose to 4.81% in June after hitting 25-month low of 4.25% in May. It is projected to hit around 6% in July.

“The month of July has witnessed accentuation of food inflation, primarily on account of vegetables. The spike in tomato prices and further increase in prices of cereals and pulses have contributed to this,” RBI Governor Shaktikanta Das said while announcing bi-monthly monetary policy review on Thursday.

The headline retail inflation is projected to surged to 6.2% in July-September quarter, which is higher than the central bank’s upper tolerance limit.