Indian government lifts ban on onion exports, imposes minimum price

The decision to allow exports with a price floor comes after the government prohibited onion exports until March 31, 2024, to increase domestic availability and control rising prices. The export ban was initially implemented on December 8, 2023.

The Indian government has lifted the ban on onion exports but imposed a minimum export price of USD 550 per ton, according to a recent notification.

The decision to allow exports with a price floor comes after the government prohibited onion exports until March 31, 2024, to increase domestic availability and control rising prices. The export ban was initially implemented on December 8, 2023.

The Directorate General of Foreign Trade (DGFT), an arm of the Ministry dealing with exports and imports, issued the notification on March 22, 2024, lifting the export prohibition but setting a minimum export price of USD 550 per ton.

The move is expected to provide relief to onion farmers, who have been facing challenges due to the export ban. Onion is a politically sensitive commodity in India, and the government has been taking various measures to strike a balance between consumer interests and supporting the farming community.

In the 2023 rabi season, onion production in India was estimated to be around 22.7 million tonnes. The government had earlier permitted exports of 64,400 tonnes of onions to friendly countries like the UAE and Bangladesh through the National Cooperative Exports Ltd (NCEL) on a case-to-case basis after approval from an inter-ministerial group.

To control rising onion prices in the domestic market, the government had previously imposed a minimum export price of USD 800 per tonne and a 40 per cent export duty until December 31, 2023. Additionally, the Centre had stepped up the sale of buffer onion stock at a subsidized rate of Rs 25 per kg in retail markets to provide relief to consumers.

The lifting of the export ban with a minimum export price is expected to strike a balance between ensuring domestic supply and supporting the interests of onion farmers. The move is also in line with the government’s efforts to promote agricultural exports and enhance farmers’ income.