Onions could become hostage to Indian economy | Wilnesh News

This report comes from this week’s CNBC “Inside India” newsletter, which brings you timely, insightful news and market commentary on the emerging powerhouse and the big players behind its meteoric rise. Like what you see? You can subscribe here.

Most people in India consider curry without onions to be sacrilegious.

Therefore, even a slight change in the price of bulb vegetables will soon become a topic of discussion on the dinner tables of hundreds of millions of people across the country.

This has been true for the past year.

According to the Lasalgaon Agricultural Produce Market Committee, India’s largest onion wholesale market, the price of raw onions increased by 165% last year. Prices for other vegetables have also increased, such as tomatoes, which are now almost double what they were at this time last year.

Bad weather was responsible for much of the damage. Last year’s drought and ongoing heat wave, CNBC reports There were previous reports that the supply of staple foods such as grains and vegetables was interrupted.

“The Indian economy remains exposed to cross-over shocks to food prices,” Michael Patra, deputy governor of the Reserve Bank of India, said in a statement at the latest monetary policy meeting. “Food prices hamper any consideration of a possible change in the stance of monetary policy,” he added.

However, Jayant Varma, another member of the central bank’s monetary policy committee who voted for the rate cut, said keeping rates higher seemed to be an “unacceptable sacrifice of high growth.” Politically speaking, the slowdown is unlikely to bode well for the newly elected BJP-led coalition government.

The anxiety was palpable this week when the government announced restrictions on traders stockpiling wheat.

“Implementing stock limits is just one option. We have many other tools at our disposal to ensure that wheat prices do not rise abnormally,” Food Minister Sanjeev Chopra told reporters, adding that there was no shortage of wheat in the country.

The government may also choose to remove import taxes on wheat (currently 40%) to drive down prices.

However, Prime Minister Narendra Modi will be in trouble if he wants to win over the country’s farmers ahead of elections in two of the country’s biggest agricultural states later this year.

Lowering tariffs would allow grains to be imported from cheaper places and reduce costs within India, but it would also cut into profits for local farmers.

Currently, the Prime Minister has chosen to increase the price of rice that the government is willing to pay farmers by 5.4%, to about $275 per ton. The grains will then be redistributed to low-income families for free, making it the largest food welfare program in the world.

There are signs that these cost pressures are unlikely to ease anytime soon due to further severe weather. This week, at least 200,000 people have been affected by floods in northeastern India, the main rice-producing area.

However, the environment of rising inflation and interest rates doesn’t appear to be deterring the company or investors.

James Thom, the firm’s chief fund manager, said: “When you talk to Indian companies, even if inflation is 6%, they are barely blinking an eye because they are growing at this rate. twice the number or more. abrdn New India Investment Trust, its trading method is similar to London’s ETF. “(They) have been used to operating at this level of inflation for decades.”

“It’s just the norm,” he added.

Apple’s Indian suppliers allegedly exclude married women from jobs. Prime Minister Narendra Modi has asked government agencies to investigate reports about Apple suppliers Foxconn Married women in the country are denied jobs assembling iPhones. Foxconn recruitment agents and human resources sources who spoke to Reuters said family responsibilities, pregnancy and higher absenteeism were reasons why Foxconn did not hire married women at its factories. Foxconn said it “strongly refutes” the accusations.

Standard & Poor’s upgraded Adani Ports’ rating and forecast strong profit growth. Credit rating agency upgraded its outlook Adani Ports and Special Economic Zone Ranging from neutral to positive, indicating the company is likely to see Resilient earnings growth and cash flow. Shares in Adani Ports have nearly tripled since hitting lows following an explosive report from short-seller Hindenburg.

“One of the cheapest ways” to invest in India’s infrastructure boom. Infrastructure spending is on the rise, and Causeway Capital Management’s Arjun Jayaraman likes a pure-play infrastructure stock (Subscriber Content) that he expects to benefit significantly. Jayaraman also believes that since the stock is a state-owned enterprise, the “risk is very low.”

The United States needs more Indian students to study science, U.S. diplomats say. Kurt Campbell, Deputy Secretary of State, Says U.S. universities should welcome more students from India Study science, not come from China. He pointed out that universities restrict Chinese students’ access to sensitive technologies due to security concerns.

Indian stocks are on track for their best monthly gain this year. this nifty 50 The index closed above 24,000 points for the first time this week, up 2%. The index is up 10% this year.