May 4th 2024.
The Indian government has made some significant changes to the export policies for onions amidst the ongoing Lok Sabha elections in the country. On Saturday, the ban on onion exports was lifted, but a minimum export price of $550 per tonne was put in place. This decision comes after the government had imposed a 40 per cent duty on onion exports just last night. It is worth noting that in August last year, a 40 per cent export duty was already imposed on onions, which was set to last until December 31, 2023.
In a notification released by the directorate general of foreign trade, it was announced that the export policy for onions has been amended from prohibited to free, but with the condition of a minimum export price of $550 per metric ton. This change is effective immediately and will remain in place until further notice. It is important to mention that on December 8, 2023, the government had banned the export of onions from March 31 this year. However, in March, this prohibition was extended until further notice.
In March, the Union Agriculture Ministry released the data for onion production, which showed a decrease in output compared to the previous year. According to the data, onion production in 2023-24 is expected to be around 254.73 lakh tonnes, which is significantly lower than the 302.08 lakh tonnes produced last year. This decrease can be attributed to a decrease in output of 34.31 lakh tonnes in Maharashtra, 9.95 lakh tonnes in Karnataka, 3.54 lakh tonnes in Andhra Pradesh, and 3.12 lakh tonnes in Rajasthan.
Last month, the Ministry of Consumer Affairs, Food and Public Distribution released an official statement announcing that the government has allowed the export of 99,150 tonnes of onions to six neighbouring countries, including Bangladesh, UAE, Bhutan, Bahrain, Mauritius, and Sri Lanka. This decision was met with protests from farmers in Maharashtra, who have been severely affected by the export ban.
The Congress party has also criticized the government's handling of the situation, accusing them of neglecting the onion farmers in Maharashtra. They stated that their manifesto promises a predictable import-export policy to prevent such last-minute policies from negatively impacting farmers. The government's decision to lift the export ban and impose a minimum export price has received mixed reactions, but it remains to be seen how it will affect the onion market in the coming days.
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