The Centre has reduced the export duty on onion to 20 per cent from 40 per cent with immediate effect as part of measures announced to help farmers get a better price for their produce.
India’s onion exports dropped to $473.72 million (₹3,922.78 crore) in 2023-24FY from $561.38 million (₹4,522.79 crore) in 2022-23, official data shows. In volume terms, onion exports dipped 32 per cent to 17.17 lakh tonnes (lt) in 2023-24 from 25.25 lt in 2022-23.
In April-June of the current fiscal, onion exports stood at 1.63 lt worth $89.21 million (₹744.28 crore).
Taking to social media, Agriculture Minister Shivraj Singh Chouhan said the government is committed to the progress of farmers. The export duty reduction will help onion producing farmers get good prices for onion and export of onion will also increase, he said, adding farmers and other onion related sectors will also benefit.
The decision to scrap the minimum export price (MEP) of onion and reduction in export duty were announced by the government through separate notifications on September 13.
The duty cut could help bridge the competitiveness of Indian onion to some extent in the global market, said M Madan Prakash, President of the Agricultural Commodities Exporters’ Association. “Turkey, Egypt and Pakistan are offering at about $600 a tonne (C&F) to Malaysia. Our prices could be around $700,” he said. Indian exporters will be able to compete, particularly when kharif onion arrivals peak around October-end, he added.
Kharif onion has begun to arrive in Kurnool in Andhra Pradesh and northern Karnataka. In Maharashtra, kharif onion arrivals are expected by the end of October.
According to Crop Watch Weather Group data, kharif onion has been planted on 2.90 lakh hectares (lh) as of August 29, against 1.94 lh during the same period a year ago. Sowing has exceeded the total kharif acreage of 2.85 lh a year ago.
The government had initially banned export of onions in December 2023 after the kharif onion last year was affected by drought and prolonged dry period, particularly in Maharashtra. However, the ban was removed on May 5 this year and a 40 per cent export duty was imposed, as well as $550/tonne MEP fixed.
The decisions to relax onion exports were announced after the Cabinet Committee on Prices, headed by Home and Cooperation Minister Amit Shah, on Wednesday took stock of control measures on various food items.
Since the export ban and the MEP on onion was said to have cost the Bharatiya Janata Party and its National Democratic Alliance quite a few seats in Maharashtra and other growing regions, the current decisions are seen as a move to placate the onion growers of the Nashik belt ahead of assembly polls in the state later this year.
Currently, the modal price (the rate at which most trades take place) at Lasalgaon in Maharastra’s Nashik district is ₹4,100 a quintal — a nine-year high at this point in time. During the same time in 2015, the modal price was ₹4,750 a quintal.
Even retail prices of onion are also and the Centre started selling onions to consumers at Rs 35/kg recently through cooperatives NAFED, NCCF and Kendriya Bhandar.