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Government Imposes 40% Duty on Onion Exports Effective May 4

The Indian government imposes a 40% duty on onion exports effective May 4, aiming to stabilize domestic availability amidst lower crop forecasts and heightened international demand.

Shivam Dwivedi
Government Imposes 40% Duty on Onion Exports Effective May 4 (Photo Source: Freepik)
Government Imposes 40% Duty on Onion Exports Effective May 4 (Photo Source: Freepik)

The Indian government has announced a 40 per cent duty on the export of onions, effective from May 4. This decision was communicated through a notification issued by the finance ministry, marking a shift in the export policy of onions.

The revised policy changes the export status of onions from 'prohibited' to 'free', subject to a minimum export price of USD 550 per Metric Ton (MT). This change comes amidst concerns over maintaining sufficient domestic onion availability, particularly in light of lower estimated Kharif and Rabi crops for the year 2023-24 compared to previous years, coupled with increased demand in the international market.

It is noteworthy that although the export of onions is generally prohibited, the government has allowed a specific quantity of 99,150 MT of onions to be exported to six neighboring countries considered as India’s friendly nations. These countries include Bangladesh, UAE, Bhutan, Bahrain, Mauritius, and Sri Lanka.

The decision to restrict onion exports aims to safeguard domestic availability and prevent shortages. Notably, last year in August, India imposed a 40 per cent export duty on onions until December 31, 2023, indicating a consistent effort by the government to balance domestic supply with international demand.

The specified allowances for onion exports to UAE and Bangladesh further emphasize the government's strategic approach to managing onion trade amidst changing agricultural dynamics and global market demands.

This move by the government reflects a strategy to strike a balance between domestic market stability and international trade commitments, particularly in the context of agricultural production forecasts and global market trends.

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