Onion prices: Can ‘Kanda Express’ address the underlying crisis?

In a bid to curb the soaring prices of onions across India, the Ministry of Consumer Affairs has launched the “Kanda Express” – a dedicated train service to transport onions from Maharashtra, the largest onion-producing state, to cities facing high demand during the festive season. While this initiative promises short-term price relief, the bigger question remains: can it tackle the root causes of onion price inflation?

The first “Kanda Express,” carrying 1,600 metric tonnes (MT) of onions, is set to reach Delhi on October 20, aiming to alleviate the price pressures in the National Capital Region (NCR), where onion prices have surged to between Rs 55 and Rs 80 per kilogram. The government’s strategy seeks to stabilize prices ahead of Diwali, but experts are concerned that this quick fix may not be enough to address deeper issues plaguing the onion supply chain.

According to ministry officials, the current price spike is a result of limited availability and stockpiling by traders. The “Kanda Express” initiative is expected to ease supply constraints, but critics argue that the real problem lies in broader inefficiencies in agricultural distribution, including storage challenges, market manipulation, and regional production imbalances.

The plan involves three special trains, each carrying 53 truckloads of onions, destined for key regions such as Delhi, the northeastern states, and parts of Uttar Pradesh and Bihar. Though the transportation cost by rail—Rs 34 lakh per trip—is significantly cheaper than by road (Rs 75 lakh), the savings might only provide temporary relief to consumers, with the Ministry hoping to bring prices below Rs 35 per kilogram.

However, while the trains might deliver immediate price cuts, long-term stability remains uncertain. Onions are already being sold at a subsidised rate of Rs 35 per kilogram through government agencies like the National Cooperative Consumers’ Federation of India (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED).

Yet, these measures do little to address the structural problems of hoarding, black-market trading, and inefficient storage systems, all of which contribute to price volatility.

High food inflation continues to be a pressing issue in India, with the rising prices of essential vegetables like onions, tomatoes, and potatoes (TOP) heavily influencing consumer price indices. The root causes behind these price surges include short crop cycles, inadequate storage infrastructure, and a heavy reliance on specific regions for production. While temporary measures like the “Kanda Express” aim to provide immediate relief, long-term solutions are needed.

Agricultural experts have called for more sustainable solutions, such as market reforms, investment in cold storage, and greater support for farmers to improve productivity. The Reserve Bank of India has proposed comprehensive agricultural reforms, including expanding storage facilities, promoting futures trading, and investing in processing and productivity to create a more resilient supply chain and prevent recurring price volatility.

The Reserve Bank of India has also proposed long-term measures, including expanding storage infrastructure and encouraging futures trading in agriculture. Without such deeper interventions, the onion supply chain is likely to remain vulnerable to seasonal price spikes, leaving consumers at the mercy of fluctuating market conditions.