Onion Exports Face 40% Duty Imposition by Government to Boost Local Supplies

The Indian government introduced a 40 percent duty on onion exports until December 31 in an effort to control the escalating prices within the local market on Saturday.

The decision to raise the export duty is in response to forecasts indicating a potential surge in onion prices come September. To mitigate this, the government had recently declared the immediate release of onions from its reserve stocks in certain regions, aiming to stabilize prices until the new harvest arrives in October.

To ensure the effective distribution of onions, the government is exploring several avenues, including e-auctions, online commerce platforms, and collaborations with state authorities to offer discounts through their cooperative and corporate retail outlets. Presently, the government holds 300,000 tonnes of onions in the Price Stabilisation Fund (PSF) to address any unforeseen price spikes during periods of low supply.

According to government records, onion prices have started to show a slight increase. As of August 10, the average retail price for onions across India stood at Rs 27.90 per kilogram, marking a rise of just over Rs 2 per kilogram in comparison to the same period the previous year.

Earlier, the National Cooperative Consumers' Federation of India (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) had also procured 150,000 tonnes each of onions from Maharashtra and Madhya Pradesh.

Moreover, in an attempt to prolong the shelf life of onions, the government initiated a pilot project in partnership with the Bhabha Atomic Research Centre (BARC) to irradiate the onions.

The Ministry of Consumer Affairs' data reveals that the annual onion buffer increased from 100,000 tonnes in 2020-21 to 300,000 tonnes in 2023-24, attributed to the procurement of the Rabi season's onions for distribution in high consumption regions during the lean season.

The Ministry of Consumer Affairs issued a statement affirming the vital role of the onion buffer in ensuring affordable prices for consumers and maintaining price stability.

Approximately 65 percent of India's onion supply originates from the Rabi season, cultivated from April to June, and serves consumer demand until the Kharif crop is harvested between October and November.