It has been over a year since the Centre lifted the onion export ban imposed in December 2023. But exporters said the damage has been long-lasting, and the lifting of the ban has not brought the situation back to normal.
The trouble began in August 2023, when the government imposed a 40% export duty on onions to curb rising domestic prices. In December 2023, it went a step further and imposed a complete export ban. Though the ban was lifted in May 2024, just days before the Lok Sabha elections in Nashik — India’s largest onion producing belt – it came with conditions. The government had put a 40% export duty and a Minimum Export Price (MEP) of $550 per metric ton.
Traders and exporters said these measures made Indian onions uncompetitive globally. As a result, Indian exporters lost international clients on a massive scale. Countries like China and Pakistan quickly stepped in to fill the gap, capturing a significant chunk of India’s traditional markets.
Now, the situation has deteriorated further. Vikas Singh, Vice President of the Horticulture Produce Exporters Association, said, “Usually, we start receiving orders from Bangladesh by the first or second week of June. This year, it hasn’t happened. It’s August now, and there’s still no demand. Our clients in Bangladesh say their import permit requests are pending with the government. We have learnt that Bangladesh has surplus domestic production this season. Sri Lanka has ramped up local output too, so we are losing business there as well.”
He added that China and Pakistan have taken full advantage of the situation. “China, thanks to its superior infrastructure, can store onions longer and can control the timing and amount of its export. This gives China an upper hand over us. Pakistan, on the other hand, enjoys government subsidies that allow it to undercut our prices.”
In light of these challenges, Indian onion exporters have sought government support. Vikas Singh, Vice President, Horticulture Produce Exporters Association, said that, “Our RoDTEP (Remission of Duties and Taxes on Export Products) rate is currently 1.9%. We are asking the government to increase it to at least 5% for a few months. At least until demand from Bangladesh and Sri Lanka picks up again. We are in talks with concerned ministers and bureaucrats. Without government help, the situation will only worsen.”
Farmers, too, were feeling the heat. Bharat Digole, President of the Maharashtra Onion Producers Association, told CNBC-TV18, “A surplus crop and limited buying from exporters has led to a flood of onions in the market, causing prices to crash. At markets like Lasalgaon and Pimpalgaon, prices are down to Rs 8-10/kg. We have written to Maharashtra Chief Minister Devendra Fadnavis, urging him to step in so farmers do not have to sell their produce at a loss.”
