Indian Onion Exports

India's onion export policy is often dynamic, as the government attempts to balance ensuring adequate domestic supply and price stability with supporting farmers and international trade.

Based on recent news (up to early 2025 in the search results):

• Removal of Export Duty: The Government of India announced the withdrawal of the 20% export duty on onions, effective from April 1, 2025. This duty had been in place since September 2024. This move was intended to benefit farmers and followed an expected higher rabi (spring) onion crop, which was projected to ease market prices.

• Removal of Minimum Export Price (MEP): The government also removed the Minimum Export Price (MEP) condition, which was set at a high of $550 per metric tonne, effective in September 2024.
• Previous Restrictions: India had previously implemented severe export restrictions:- An export ban was in place for nearly five months, from December 8, 2023, until May 3, 2024, to control domestic prices and ensure local availability due to lower production estimates.
  - The ban was lifted in May 2024, but with immediate conditions: an export duty of 40% and an MEP of $550 per metric tonne.
  - Limited quantities were allowed for export to specific neighboring countries (like Bangladesh, UAE, Bhutan, Bahrain, Mauritius, and Sri Lanka) even during the ban period, often through government-to-government channels.
  
  

  India's Role in the Global Onion Market

  To understand the impact of this ban, it's crucial to know India's global position:

  • World's Largest Producer: India is the 2nd largest producer of onions after China.

  • Major Exporter: It is one of the largest exporters of onions in the world.

  • Key Buyers: India's primary export destinations include Bangladesh, Malaysia, UAE, Sri Lanka, Nepal, and Indonesia.

  When India restricts exports, it creates a massive supply gap in the global market.

   

  Key Drivers of Policy:

  The government frequently uses policy tools like export bans, Minimum Export Prices (MEP), and export duties to manage the politically sensitive issue of domestic onion prices and supply. When domestic prices rise due to lower production (e.g., from poor kharif or rabi harvests), export restrictions are usually implemented. When domestic supply is comfortable and prices soften, restrictions are relaxed to support farmers and allow them to benefit from the export market.6

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