India bans export of onion till March 2024

A 40% levy on onions exported was imposed by the government in August in an effort to curb price increases and enhance supply on the home market through December 31, 2023.

Follow us:
Courtesy: ANI

Keeping the increasing domestic availability and prices in check, the government of India on Thursday has prohibited the export of onions till March 2024. According to the sources, the notification was issued on December 7, 2023, and will be in effect until March 31, 2024.

The Directorate General of Foreign Trade (DGFT) notification said the export of onions will be, however, allowed on the basis of permission granted by the central government to other countries based on the request made by the countries. 

Onions are currently being sold at around Rs 60 per kg in retail markets.

It is to be noted here that a 40% levy on onions exported was imposed by the government in August in an effort to curb price increases and enhance supply on the home market through December 31, 2023.

Following that, on October 29, the central government established a Minimum Export Price (MEP) for onions exports of USD 800 per tonne on a free-on-board basis.

Meanwhile, the government has maintained the buffer stock to meet any exigencies and for price stabilisation if rates go up significantly during the lean supply season.

Here are some of the potential impacts of this ban:

Increased domestic availability: The ban is likely to lead to increased availability of onions in the domestic market, which could help to stabilise prices.

Reduced exports: Indian onion exports are likely to be significantly reduced as a result of the ban. This could have a negative impact on Indian onion farmers who rely on exports for their income.

Higher prices in importing countries: The ban is likely to lead to higher prices for onions in importing countries, as they will have to find alternative sources of supply.

However, it is clear that the government's decision is likely to have a significant impact on both the domestic and international onion markets. But it is still too early to say what the long-term impact of the ban will be.