Onion growers and traders have urged the Union government to withdraw the 20 per cent export duty and implement a stable onion export policy to address the ongoing challenges in the sector. The Horticulture Produce Export Association has highlighted that frequent export restrictions imposed by the government have severely disrupted the onion export market, leading to price fluctuations and preventing farmers from receiving fair compensation for their produce.
Earlier this month, the government reduced the export duty on onions to 20 per cent from 40 per cent, which had been in place since May 4. However, exporters argue that the duty still cripples their competitiveness in international markets, making it difficult for them to sustain operations.
During a recent meeting of onion exporters, industry representatives pointed out that India’s onion production is sufficient to meet both domestic and export demands. Despite this, government restrictions have caused significant financial losses for farmers and traders. The impact has been particularly harsh on farmers in Maharashtra, where onion cultivation is a primary source of income. They are struggling to earn a fair livelihood due to the unstable export policy.
The association has called on the government to immediately remove the export duty and establish a long-term policy that allows farmers to sell their produce at fair prices in the global market, thereby ensuring the sustainability of the onion export industry.
‘Not feasible even until new crop arrives’
“The 20 per cent duty reduction, which was implemented a few days ago, has not yielded any results, as at this rate, we are still not competitive in international markets. The only port we can export is to Bangladesh as their markets have been empty because of their political situation. They import from Pakistan and transit times are 20 days plus,” said one of the exporters
However, according to industry players even if the export duty is removed, it won’t be feasible to resume exports until the new crop arrives in Maharashtra and Karnataka. Only an increase in arrivals will bring down prices and make exports competitive. According to the Agriculture Minister’s estimates, the sowing this year is double that of last year. But since last year’s global crop yield was low, this year there is abundant supply everywhere. Regaining India’s leading position in the export market after facing 2 to 3 years of continuous bans and restrictions will be nearly impossible this time around.
Industry players said that previously, it was mainly Pakistan that posed a challenge to them in the export market. Now, once their crop is exhausted, they import from Iran and Afghanistan through their soft borders, ensuring a year-round supply via Pakistani exporters. “At present, international buyers aren’t even responding to Indian exporters because they believe we are not reliable suppliers. The government needs to take bold steps to promote exports, such as offering incentives. We are facing the possibility of an oversupply and glut in 2025,” said one of the exporters.
Nasik currently has old crop stock that is not suitable for export. Meanwhile, Karnataka farmers, with their new crop, are fully capitalizing on the situation, with onion prices ranging from ₹35 to ₹40 per kg. The majority of arrivals from the southern regions consist of smaller-sized onions, ranging from 25 to 40 mm. Larger-sized onions are expected to arrive only after Dussehra, around mid-October.