Govt plans subsidized tomato sales to cool price surge

New Delhi: The government is preparing to sell tomatoes at subsidized rates through cooperative outlets to cool a price surge driven by supply disruptions, according to two government officials aware of the development.

The proposed market intervention comes amid a sharp increase in tomato prices, with the all-India average retail price rising to ₹44.36 per kg, up from ₹34.43 per kg a year ago, the officials said. The issue was discussed by the department of consumer affairs last week.

In several local retail markets, tomatoes are currently being sold at ₹60-70 per kg. Retail tomato prices have jumped in India, the second largest producer globally, due to delays in arrivals, weather-related disruptions in producing regions, and lower market supplies during the transition between crop cycles. To be sure, in some localities of Delhi, including Greater Kailash, tomatoes are being sold at around ₹92 per kg.

As part of the plan, the government is likely to sell tomatoes at ₹35-45 per kg through outlets operated by the National Cooperative Consumers' Federation of India (NCCF) and other cooperative networks, the officials said, requesting anonymity.

“The intervention will be undertaken through subsidized tomato sales, which are likely to begin in select locations across Delhi-NCR and Mumbai before being expanded to other cities, depending on market conditions,” said the first of the two officials cited earlier.

India's retail food inflation rose 4.78% year-on-year, accelerating from 4.2% in April, driven by tomatoes, ginger and other items. Sharp increases in tomato prices have historically led to higher vegetable inflation feeding into food inflation.

For instance, tomato prices surged to over ₹200 per kg in several markets during July-August 2023 following supply disruptions caused by heavy rains. This spike led to vegetable inflation soaring to 37.3% in July 2023, while retail food inflation accelerated to 11.5%, its highest level in more than three years.

Retail prices in key consumption centres have also firmed up, with tomatoes selling at ₹56/kg in Delhi, ₹63/kg in Mumbai, ₹37/kg in Chennai and ₹38/kg in Ranchi, compared to ₹50, ₹37, ₹28 and ₹24 per kg respectively, a year ago. Mumbai and Ranchi recorded the sharpest price increase of 70.3% and 58.3% respectively. Also, tomatoes are being sold by online platforms such as BigBasket, Amazon, and Blinkit between ₹79/kg and ₹95/kg.

“The government is closely monitoring the price situation and has kept its teams ready for immediate market intervention if consumers face any abnormal increase in prices,” the second official said.

Queries emailed to the spokespersons of the ministry of consumer affairs, food and public distribution, Amazon, Blinkit and BigBasket remained unanswered till press time.

The Centre has intervened in the tomato market several times in recent years to contain sharp price spikes. In July 2023, NCCF and National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) sold tomatoes at ₹90 per kg, later reducing the price to ₹80, ₹70 and ₹50 per kg as market prices eased. In 2024, tomatoes were sold at ₹60 per kg in Delhi-NCR when retail prices crossed ₹75-80 per kg. Similar interventions were undertaken in 2025, with the department of consumer affairs selling tomatoes at ₹48 per kg in parts of NCR amid monsoon-related supply disruptions.

Economists view the recent increase in tomato prices as a temporary phenomenon, given the highly perishable nature of the commodity, unlike onions and potatoes, which can be stored for longer periods and whose prices have remained relatively stable.

“Any intervention by the government through subsidized sales helps in bringing down retail prices and, in turn, ease inflationary pressures…This is a temporary rise in tomato prices caused by weather-related disruptions. Tomato prices tend to rise sharply when supplies are affected, but they also correct quickly once fresh arrivals improve. The government should encourage greater use of processed products such as tomato puree to reduce dependence on fresh tomatoes during periods of supply disruption and smoothen prices.,” said D.K. Joshi, chief economist, Crisil.

Tomatoes are among India's most widely consumed vegetables, with annual production of about 21.46 million tonnes from around 8.34 lakh hectares, according to the Union agriculture ministry's second advance estimates for 2025-26, released on 12 June.

Traders say supplies remain comfortable, but persistent rainfall has affected the quality of the crop, leading to higher wastage because tomatoes are highly perishable.