Onion prices in major Indian cities went up by Rs 5-10 per kg on Thursday as government's efforts to boost supply suffered a setback with Pakistan banning exports of the commodity via Wagah border.
Even as secretaries in the key economic ministries reviewed the situation with cabinet secretary K M Chandrasekhar, watchdog body Competition Commission of India ordered a probe into possible cartels among traders.
As 300 India-bound trucks carrying 3,000 tonnes of onion had reached the Wagah border near Amritsar, Pakistan's commerce ministry imposed a ban on movement through land route, giving a shock to India.
Onion prices increased to Rs 60-65 a kg in major metros such as Delhi, Chennai and Mumbai.
"Retailers have jacked up prices on reports of ban by Pakistan," general secretary of Tomato and Onion Merchants' Association in Delhi's Azadpur Mandi said.
New Delhi dubbed the Pakistan's decision as "shocking", with commerce and industry minister Anand Sharma stating the issue has been taken up with the concerned authorities in Islamabad.
"It is shocking and unfortunate that Pakistan has banned onion exports to India via land route...The matter has been discussed with the high commissioner in Islamabad, who has already met the concerned officials there," Sharma said.
He said Pakistan has been asked to reconsider its decision or at least release the trucks carrying contracted quantity of the commodity.
As Sharma reviewed the situation with heads of government importing agencies STC and PEC, top secretaries of the ministries of agriculture, commerce and finance went into a huddle with Chandrasekhar to find alternative supplies.
"I have concluded a contract with Pakistan via sea route. Onion will arrive at Mundra port(in Gujarat)," commerce secretary Rahul Khullar said after meeting of the Committee of Secretaries.
The government of Punjab, Pakistan's most populous province, stopped onion exports to India this morning. The ban on exports has been imposed to control prices within Pakistan, a government spokesman said in Lahore.
Meanwhile, the Competition Commission ordered a probe into the possible cartelisation by traders.
"The commission has held many deliberations to study the possibility of cartelisation by onion traders and prima facie there appears to be a case. So, we have taken a suo moto action in carrying out the probe," an official said.
The Director General (Investigations) of the CCI will submit the report on probe within 45 days.