Indian truckers' strike enters third day, prices spiral

The strike, which began Saturday, was called by the All India Motor Transport Congress (AIMTC), the country's biggest truckers' union, to protest a planned service tax on transport booking agents.

The union said supplies of essential commodities would be exempted from the strike for the first three or four days to allow the government to respond to its demand that the tax be scrapped.

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In his budget, Finance Minister Palaniappan Chidambaram announced a 10 percent service tax on freight agencies to enlarge the service tax net and boost government revenues.

A finance ministry statement Friday clarifying that the tax only applied to booking agents, not transport operators or truck owners, did little to appease the AIMTC, which argued that booking agents and truck owners are often from the same firm.

"There is a likelihood of negotiations taking place today (Monday) between the Finance Ministry and our association," AIMTC representative Ashok Mehta told the Press Trust of India news agency.

According to media reports Monday quoting officials, the prices of perishable commodities have risen even though the movement of essential goods has not been affected.

One report said the Delhi government had decided to allow vendors to use local buses to transport vegetables to ensure there were no shortages.

The strike comes at a time when India's inflation rate is riding at a three-and-a-half year high of 7.96 percent, fuelled by surging global oil prices and rising food prices sparked by patchy monsoon rains.