Smugglers Defy Export Ban by Shipping Onions Disguised as Grapes, Potatoes

In a brazen display of defiance against India's export ban on onions, smugglers have resorted to deceptive tactics, mis-declaring the sought-after vegetable as grapes, potatoes, and other commodities. This audacious move comes amidst a surge in international onion prices, with the bulb fetching up to 140 rupees per kilogram in markets such as Malaysia, Sri Lanka, and the UAE.

The ban, implemented on December 8 to stabilize domestic prices, has inadvertently spurred illegal traders to exploit the significant price discrepancy between local and international markets. With estimates suggesting weekly illegal exports of 700-800 tonnes, smugglers are raking in substantial profits, reportedly around 30 lakh rupees per container.

Prompted by concerns raised by industry stakeholders, the finance ministry has instructed the customs department to take legal action against exporters engaged in this illicit trade. According to top onion exporters, this marks the first instance of smugglers resorting to such deceptive practices to circumvent export restrictions.

According to a report of TOI, The recent alert raised by the association prompted action from the finance ministry, urging the customs department to pursue legal measures against onion smugglers. The board has been made aware that certain exporters are illicitly shipping onions under the guise of Bangalore rose onion, shallots, Krishnapuram red onion, and even potatoes, in defiance of the export ban, stated a circular issued by the Central Board of Indirect Taxes & Customs on January 20, addressed to all chief commissioners of the customs department.

According to leading onion exporters, this marks the inaugural employment of such deceptive tactics by smugglers to evade export restrictions. Sri Lanka and Malaysia have emerged as primary destinations for these shipments. Expressing concern, Ajit Shah, President of the Horticulture Produce Exporters' Association, voiced apprehension that this novel method of smuggling could set a troubling precedent, persisting even in the face of future export duties imposed by the government. The onion industry has also raised concerns over India's diminishing international market share, attributing it to the uncertainty surrounding export policies.

In the interim, onion farmers have been persistently agitating for two months, calling for the removal of the export ban. Bharat Dighole, president of the Maharashtra Onion Association, emphasized, The emergence of onion smuggling highlights that the export ban benefits only a select group of traders, leaving farmers to endure losses due to depressed prices.

Recently, a delegation of central government officials toured the onion cultivation areas in Maharashtra. It is anticipated that the team will submit recommendations to the government regarding the export ban, set to lapse on March 31st.