India imposes 40 per cent export duty on onions to boost domestic supply

In a bid to bolster domestic onion availability, the Government of India has implemented a 40 per cent  export duty on onions, effective immediately until December 31, 2023.

Earlier, on August 11, the government took decisive action by releasing onions from the 300,000-tonne buffer established this year under the price stabilization fund (PSF). This move was aimed at curbing escalating onion prices, a phenomenon occurring against the backdrop of rising costs across the vegetable sector.

After experiencing a period of relative stability over the past two years, onion prices have recently surged despite record arrivals at mandis, which serve as significant marketplaces for agricultural commodities. The price surge is attributed to anticipated supply constraints in the upcoming months. This scenario arises from unseasonal rainfall in key onion-producing states, leading to reduced shelf-life for stored onions.

The price hike has been evident, with onion prices in Maharashtra's Lasalgaon mandi soaring from Rs 1,370 to Rs 1,700 per quintal (100 kg) within a week. Retail markets have seen a similar trend, with onion prices climbing to nearly Rs 30 per kg on August 11. This surge contrasts with the all-India average price of Rs 26 in January, as reported by the consumer affairs' price monitoring division.

In response to the situation, Consumer Affairs Secretary Rohit Kumar Singh engaged with the managing directors of the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers' Federation of India (NCCF). Their deliberations culminated in finalizing the modalities for the strategic disposal of onions from the buffer.