Government Bans Onion Exports with Immediate Effect

The government banned export of onions yesterday, anticipating a shortfall in the commodity as exports have increased by nearly 30% in the April-July period. Exports of all varieties of onions would not be allowed with immediate effect, according to the notification released by the Directorate General of Foreign Trade.

The notification said “The provisions under the Transitional Agreement shall not be applicable under this notification,".  IN FY 20 so far, India has exported fresh onions worth $328 million and dried onions worth $112.3 million. In the April-July period onion exports to Bangladesh have soared by nearly 160%.  

Onion prices are currently traded near Rs.40 per kg and the wholesale and retail prices have fallen by 35% and 4%, respectively in the month of August. The government has to take this decision almost every year, in order to keep domestic prices under control. Same decision was taken even last year on 29 September, when onion exports were banned and the government had imposed countrywide stock limits to bring down prices of onions, which had appreciated sharply ahead of state elections in Maharashtra and Haryana. Then in the month of March 2020, export restrictions were lifted due to supply shortage in the country because of excess rain and flood affecting the summer crop.