Government Lifts Onion Export Ban, Sets Minimum Export Price at USD 550 Per Tonne

The government has decided to lift the ban on onion exports while simultaneously implementing a minimum export price (MEP) of USD 550 per tonne. This decision holds particular importance due to the political sensitivity of the commodity, especially amidst ongoing general elections in the country.

"The export policy of onions is amended from prohibited to free subject to MEP of USD 550 per metric ton with immediate effect and until further orders," the directorate general of foreign trade (DGFT) said in a notification.

Last night, the government announced a 40 percent duty on onion exports. This action echoes a similar measure taken in August of the previous year, when India imposed a 40 percent export duty on onions, effective until December 31, 2023.

Farmers were worried since the heatwave might have damaged the onion stock and were very upset with the government's stand on the export ban. Now that the ban is removed, farmers are feeling considerable and happy. After the decision, the onion rates in APMC markets have seen an increase. Today, on May 4, Lasalgaon APMC recorded a rate of Rs. 2100, which was Rs. 1300 on April 30.

This decision has brought much-needed relief to farmers, who had been grappling with drop in prices in the domestic market due to the surplus caused by the export ban. With the ban lifted, farmers are optimistic about fetching better prices for their Rabi season onions.

To curb inflation, the government had imposed a ban on onion exports in December 2023, initially set to expire on March 31, 2024. However, an extension was granted indefinitely through a notification issued on March 22, 2024. The decision to allow the export of 2000 metric tons of white onion from Gujarat on April 25, 2024, sparked controversy in Maharashtra, with farmers and opposition leaders framing it as a regional disparity between Gujarat and Maharashtra.

Under the new export conditions, a Minimum Export Price (MEP) of US $550 per tonne has been mandated, equivalent to approximately Rs 46 per kg in Indian currency. This move has sparked optimism among farmers and exporters, who view it as a welcome return of Indian onions to the global market after a five-month hiatus.

Continued opposition from Maharashtra's farmers, traders, and exporters against the export ban prompted the government to reconsider its stance. 

"We welcome this decision. The decision is very good for farmers. Though the decision has come with rules, we welcome it. The ban was there since December. Even with a few rules, it's good that at least the ban is now removed, and we will be able to proceed with exports," said Khandukaka Deore, President of the Nashik District Onion Trader Association.