An officer working with the Government of India grew his beard and took leave that was his due, telling those who were curious that he was going on a pilgrimage. He returned a fortnight later.
Seemingly unrelated to this, a few days afterwards, huge quantities of onions landed in India where onion prices were making headlines in newspapers and upsetting household budgets.
Needless to add, the imported onions had increased the supply, catered to demand and resulted in the cooling of onion prices. The officer had, in fact, travelled to a foreign country where onion prices were low and did all that was required for India to import onions
The story, recalled occasionally by those in the commerce ministry, seems like good fiction. But those in the know say international trade is also about strategy, low diplomacy and skulduggery.
Early in May, the Deputy Foreign Minister of Turkey, Sedat Onal, visited Delhi. The Ministry of External Affairs issued a statement that they had held “cordial discussions on various aspects of bilateral ties including examining opportunities for enhancing trade and investment relations”.
On August 5, Parliament scrapped Article 370 giving special status to J&K. Among the countries whose leadership expressed themselves against what is an internal matter of India were Turkey and Malaysia. In the fallout that followed, New Delhi considered restrictions on trade with these two countries.
But, notwithstanding the political noise asserting “no trade” with such countries, the government is now importing 11,000 tonnes of onions from Turkey. And, after offering a discount, Malaysian palm oil sellers continue to have buyers in India.
The verbal animosity of trade wars apparently gets less hostile and more practical when local concerns play out on the ground.
The heavy monsoons in September affected onion prices in Maharashtra adversely, among other things. Given the essential nature of onions in kitchens in the country, India immediately banned their export.
India’s ‘Act East’ policy notwithstanding, this hit onion-importing Bangladesh hard. And now, onions from Turkey will arrive, and hopefully, the prices, now at around Rs100 a kg in the national capital's retail markets, will begin to move southward.
Loud noises are apparently not made by countries before importing essential food items, as these will push up prices in the international market. And, many a time, the deals are confidential until executed.
India is one of the largest buyers of crude palm oil from Malaysia, where prices have now dropped over fears that New Delhi will slap a higher import duty on account of President Mahathir bin Mohamad’s criticism of the scrapping of Article 370. Even though the duties on Malaysian palm oil have not changed, importers had kept off Malaysian palm oil. Now, according to reports, some refiners have resumed buying. It could well be a case of low diplomacy and strategy—of letting the noise be forgotten so the trade can continue.
India needs to bring down the price of onions and India needs palm oil. Economics, so far, prevails over the voices calling for trade to be blocked.