Kathmandu: Addressing the escalating prices of tomatoes within the nation, Indian Union Finance Minister Nirmala Sitharaman revealed on Thursday that India will initiate the import of tomatoes from Nepal due to the remarkable surge in prices prevailing in the country.

During her address in the Parliament, Sitharaman informed the audience that the initial batch of tomato imports is projected to arrive in the northern Indian cities of Varanasi, Lucknow, and Kanpur by Friday.

Over the past three months, the wholesale price of tomatoes has surged by an astounding 1,400 percent, reaching a historic high of 140 rupees ($1.69) per kilogram. This surge has been attributed by farmers to factors such as inadequate rainfall, elevated temperatures, and a viral outbreak that has severely affected the crop, as reported by Reuters.

RBI Governor Shaktikanta Das also acknowledged the impact of rising tomato prices, alongside the upswing in cereal and pulse costs, on inflation. These observations were made during the announcement of crucial decisions made at the Monetary Policy Committee (MPC) meeting. Governor Das further anticipated the possibility of a significant correction in vegetable prices.

The months of June and July witnessed a notable spike in tomato prices, leading to a surge in overall inflation. In June, vegetable prices, constituting 6 percent of the total Consumer Price Index (CPI), reached a seven-month peak, recording a month-on-month increase of 12 percent, as indicated by official data reported by PTI.

Typically, prices tend to ease starting from August with the arrival of the harvest in the market. However, market analysts predict that this year, prices are expected to remain elevated until October due to constrained supplies.

The escalated costs of essential commodities such as onions, beans, carrots, ginger, chilies, and tomatoes not only contribute to voter discontent in anticipation of upcoming state elections, but also exacerbate retail inflation. Retail inflation is projected to hit a seven-month high in July, potentially reducing the possibility of the Reserve Bank of India (RBI) implementing interest rate cuts this year.

Farmers from Karnataka, the third-largest tomato-producing region in India, have reported challenges stemming from inadequate rainfall, higher temperatures, and a viral outbreak. Moreover, the tomato crop was cultivated on a smaller land area compared to the previous year due to a collapse in prices.