India has allowed exports of onions on a government-to-government basis to certain countries, as per the recommendation of the Ministry of External Affairs, informed sources revealed.
One source indicated that a limited quantity of onion exports has been allowed for bilateral purposes, although no decision has been made regarding the complete lifting of the ban on onion exports. Details about the exporting agency could not be confirmed.
Another source stated that the government has authorized the export of onions in restricted amounts to countries including Bangladesh, Sri Lanka, Mauritius, Bahrain, Bhutan, and Nepal, among others.
In December 2023, India, the world’s second-largest exporter of onions, implemented a ban on the shipment of this kitchen staple until March 2024 due to escalating domestic prices and the threat of shortages. Consequently, onion prices skyrocketed in neighboring countries.
Continue Exploring: India’s onion export ban triggers soaring vegetable prices across Asia
With the onset of rising onion prices in August 2023, the finance ministry introduced a 40% export duty to restrict shipments. Despite this measure, its intended impact was not realized due to under-invoicing. Consequently, the government enforced a minimum export price of $800 per tonne on onions, effective October 28.
Due to heavy rainfall and hail storms causing damage to crops in regions like Nashik and Ahmednagar in Maharashtra, onion arrivals declined during the peak season in November. This led to a surge in prices, prompting the government to enforce a ban on the shipment of onions effective December 8.
Continue Exploring: India halts onion exports as prices soar due to unseasonal rainfall
This has caused onion prices to drop from over INR 40 per kg to about INR 13 currently in the wholesale market of Nashik, India’s main onion-growing region, leading onion farmers to protest for two months demanding the lifting of the export ban.
Onions account for 0.6 percentage points of the overall inflation index and 10 percentage points in the vegetable basket. Any increase in onion prices has the potential to elevate food inflation, which is a cause for concern for the government, particularly with Lok Sabha elections looming in a few months.
In early February, a delegation of central government officials conducted a visit to the onion-growing regions of Maharashtra. The purpose of the visit was to provide recommendations to the government regarding the export ban.
Meanwhile, on Sunday, some exporters wrote to the government suggesting that instead of imposing a complete ban on onion exports, the government should allow outbound shipments on a restricted basis. They emphasized that a significant export volume could lead to a notable price increase in the domestic market.
Continue Exploring: Onion prices plunge by 50% following govt ban on exports
