Impact of Export duty on Onion

The implementation of 40 per cent export duty on onions is poised to discourage certain farmers from planting onions during the current Kharif season. This decision comes after a period of subdued onion prices over the past 18 months, and the move to limit exports aims to prepare for late Kharif onion cultivation. Nationallevel agricultural challenges, including economic recessions, have resulted in significant delays for major Kharif crops. The ongoing drought conditions cast uncertainty over the future cultivation of Rabi (summer) onions. Consequently, farmers will likely be motivated to grow crops that yield immediate financial gains during this crisis.

- DEEPAK CHAVAN

While the short-term gains of export restrictions might favour the government, this strategy could lead to long-term losses. The irregularity in export policies could also benefit competing onion-producing nations like Pakistan and China, ultimately affecting India's export market. Furthermore, the imposition of export duties on Indian onions presents a significant challenge for Bangladesh. The period from August to January serves as the off-season for onions in Bangladesh. Following India's export duty increase, onion prices in Bangladesh escalated by 80 to 100 per kg. This situation may prompt Bangladesh to reconsider the ten per cent import duty imposed on onions. Typically, Bangladesh annually requires 2.8 million tonnes of onions, with 70 per cent of this demand met domestically and the remaining 30 per cent sourced from imports, primarily from India.