40% export duty placed on onions till year-end

The Union government on Saturday imposed a 40% tariff on the export of onions to restrict overseas sales, according to a notification that comes amid the anticipation of price rise ahead of a festival season when demand for most commodities goes up.

- Zia Haq

The government has been battling to control retail inflation, which soared to a 15-month high of 7.44% in July, led by food prices. The export duty will be in force till December 31 2023, the notification said. On August 11, the Centre announced it would start releasing stocks of onion from state-owned reserves of 300,000 tonne to boost supplies.

"In order to increase the availability of onions in the domestic market especially in view of the upcoming festival season, the government has decided to impose a 40% duty on the export of onions. It was also being noticed that there was a sharp rise in exports in the recent past," consumer affairs secretary Rohit Kumar Singh told HT.

Onion supplies are tightening in some markets and the kitchen staple could soon see an inflationary spell due an annual lean season when stocks dip, wholesalers and analysts said.