“India Implements 40% Onion Export Duty to Counter Potential Price Surge and Enhance Domestic Supplies”


The Indian government has introduced a 40% export duty on onions until December 31, 2023, in response to concerns about rising onion prices. This decision aims to stabilize prices and secure domestic supplies while also exploring alternative distribution methods.

"India Implements 40% Onion Export Duty to Counter Potential Price Surge and Enhance Domestic Supplies"
"India Implements 40% Onion Export Duty to Counter Potential Price Surge and Enhance Domestic Supplies"

In a bid to curb potential onion price hikes and enhance domestic supplies, the government has implemented a 40% export duty on onions, effective until December 31, 2023. The Ministry of Finance issued an official notification on Saturday, outlining the new duty and its intended impact on the market.

The decision to impose the export duty comes in response to growing concerns over an anticipated increase in onion prices during the upcoming month of September. By placing this export duty, the government aims to stabilize prices and ensure a steady flow of onions in the domestic market.

Earlier this month, on August 11, the central government initiated the release of onions from its buffer stock. In a strategic move, the government had already outlined its intention to maintain a buffer stock of 3 lakh tonnes of onions for the 2023-24 season, building upon the 2.51 lakh tonnes maintained during the preceding year, 2022-23. The purpose of this buffer stock is to address unforeseen circumstances and maintain price stability, especially during periods of limited supply.

Rohit Kumar Singh, Secretary of the Food and Public Distribution Department, chaired a meeting with key figures from government agricultural marketing agencies, including the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers’ Federation of India Limited (NCCF). During this meeting, modalities for the disposal of onion stocks were finalized. The plan involves targeting specific markets in states or regions where retail onion prices surpass the national average. This approach also considers areas where price increases over the past month and year exceed a set threshold level.

To further streamline the process, the government is exploring options such as e-auctions and retail sales through e-commerce platforms for the distribution of onion stocks.

The onion market in India witnesses a distinct seasonal pattern. Rabi onions, harvested between April and June, account for approximately 65% of the nation’s total onion production. These onions fulfill consumer demand until the Kharif crop is harvested in October and November.

As part of routine practice, procured stocks are released through targeted open market sales. Additionally, they are supplied to states, Union territories, and government agencies for distribution through retail outlets, especially during periods when supplies are limited.

With the imposition of the 40% export duty on onions, the government is taking proactive steps to ensure that onion prices remain stable and accessible to consumers across the country. This move reflects a commitment to maintaining food security and price control in the face of potential supply disruptions.

Sources By Agencies

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