Onion Farmers in India Losing Out in Global Market Due to Export Duty: Report
New Delhi: Indian onions are losing out the race to the global onion market due to the heavy export duty imposed by the Union government, businessline reported.
The government had banned the export of onions in December 2023 fearing domestic shortages. Ahead of Lok Sabha elections, it lifted the ban but imposed a 40% export duty on onions in May 2024. Later in September, ahead of the Maharashtra Assembly elections, the government reduced it to 20%, which is where it stands today.
The export duty imposed by the government has forced buyers to import onions from other countries, such as China and Pakistan.
CT Munshid, Secretary of Kerala Exporters Forum, told businessline that many exporters from Kerala despatch onions to Gulf markets after procuring them from Nashik in Maharashtra. However, the long-standing export duty has made Indian onions lose their competitive edge.
“Our prices are $350 a tonne and Pakistan is offering onions at $280. The 20 per cent duty is making it difficult for Indian onions in the global market,” Ajit Shah, President, Horticulture Produce Exporters Association (HPEA) told the daily.
The Wire has earlier reported how the fluidity of export policy was most glaringly reflected in the case of onions. On August 19, 2023, a 40% export duty was first imposed and a minimum export price of $800 per metric ton was fixed till December 31, 2023. However, on December 8, the government banned onion exports.
This is because Indian policy makers have been giving higher priority to domestic food inflation.
The ban had resulted in a massive agitation by farmers in Maharashtra as the prices crashed. However, their concerns have still not subsided.
Traders have complained that because of the export duty the returns are not good for onion farmers, even though the production has been high.
Pakistan, China, Sudan, Turkey, Iran, Egypt and Holland are among countries that have made inroads into India’s traditional markets.
Shah told businessline that Kerala exporters’ forum was planning to raise the issues at a joint meeting next week convened by the Directorate-General of Foreign Trade and the government. He said that the duty on onions should be scrapped soon.
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