Onion, once a “star” of the Indian domestic market, is now facing a sharp slump in both prices and exports. Prices fell by 49.5 per cent in September, marking the steepest decline in six and a half years, according to data based on the Consumer Price Index. This financial
year, a marginal rise of 2.85 per cent was recorded only in April.
The continued price fall has come as a major setback for farmers during a period when onion prices typically surge. Normally, prices rise between September and December, but this year, they have remained stagnant despite rains affecting the harvest. Farmers attribute the stagnant prices to the large stockpiles still held by traders from the previous harvest.
India remains the world’s largest producer of onions, with an estimated output of 2.5 crore tonnes in 2023–24. The country exports about 2 million tonnes annually, with up to 40 per cent going to neighbouring Bangladesh. However, recent export restrictions imposed by India have weakened its foothold in that market.
Restrictions backfire
To control domestic prices, India banned onion exports in December 2023.
Although the ban was lifted in May 2024, a minimum export price (MEP) of $500 per tonne and a 40 per cent export duty were introduced. In September 2024, the Centre scrapped the MEP and reduced the duty to 20 per cent.
All export restrictions were eventually lifted on April 1, 2025, but by then, Bangladesh had shifted its imports to Pakistan, Egypt, Turkey, and China.
Farmers and traders now warn that unless exports recover soon, the domestic market could face a prolonged price slump, deepening the crisis for onion growers across major producing states.
