On Saturday, March 22nd, the central government announced that the 20% export duty on onions would be withdrawn on April 1st, 2025.
This will finally remove all the restrictions on onion exports and is likely to ensure fair prices for farmers.
This relief though has arrived after 1 and a half years of restrictions that included a minimum export price an export duty and even bans on the export of onion.
These restrictions have been causing huge losses to farmers. Many in fact had not been able to recover even their production costs.
In 2023, there was high inflation in the retail prices fuelled by domestic shortages of this kitchen staple. Now to ensure that the vegetable was affordable and available for domestic consumers the union government on December 8 2023 banned the export of onion.
The government has imposed a ban on onion exports until March next year to boost domestic availability and maintain stable prices.
The Directorate General of Foreign Trade has changed the onion exports from free to prohibited until March 31, 2024, according to a notification.
While the bulb became affordable to consumers, the low prices at the mandi level started eating into farmers’ margins.
The export ban was initially set to expire on March 31, 2024; however, that did not happen, and the ban was extended indefinitely.
As Lok Sabha elections approached, the ban was only lifted on May 4, 2024, but then came the export duties. While the ban was lifted, the union government imposed a 40% export duty, which was then reduced to 20% in September.
Maharashtra, Asia’s largest onion market Lasalgaon is located. Farmers here have been protesting since 2024 for the removal of the restrictions.
According to them, while the initial ban in December 2023 was put in place to address domestic shortages, it should not have been extended beyond March because then the new crop ensured that there was a fresh supply of onions in the months that followed.
For instance, even before the lifting of the restrictions, onion arrival in benchmark markets like Lasal gaon and Pimpal gaon had increased.
Again, helping lower the prices for consumers but causing losses to farmers. The modal prices in Lasalgaon and Pimpalgaon on March 21, 2025, were rupees 1330 / quintal and rupees 1325 / quintal, respectively.
Compare this with the average cost of growing a quintal of onions, rupees 2200 to rupees 2500.
According to the government data, the all-India weighted average model prices fell by 39% even though the present mandi prices of onion were higher than they were during the same period in previous years.
Similarly, the all-India average retail prices recorded a decline of 10% over the past 1 month.
In this scenario, according to the Consumer Affairs Ministry and “I quote the decision to withdraw the 20% export duty stands as another Testament to the government’s commitment to ensuring remunerative prices to farmers”.
While maintaining the affordability of onions to the consumers at this crucial juncture, where both mandi and retail prices have softened following the expected arrival of rubby crops in good quantities.
According to the Agriculture Ministry, ruby onion production this year is estimated at 22.7 million tons, 18% higher than the 19.2 million tons last year.
The ministry noted that the estimated higher production this season is expected to further ease market prices in the coming months.
Retail inflation in onion in November was 5.59% on year because of high base effect.
According to the agriculture ministry, output of onion in the 2023-24 crop year (July-June) is estimated at 24.21 MT, a decrease of 20% compared to the previous year because of a drop in rabi output.
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