February 24, 2024, 2:22 pm

Staff Correspondent

2023-12-09 00:52:36 BdST

India extends curbs on onion exports till 31 March

India has extended restrictions on the outbound shipments of onions until the end of this fiscal year or 31 March 2024.

This move comes as the Indian government seeks to ensure ample supply in the country and keep a lid on prices of this key political crop that in the past was associated with toppling governments.

On the other hand, the extension of export curbs is likely to affect the Bangladesh market as the country is one of the major buyers of Indian onion.

The Indian government had introduced a minimum export price (MEP) of $800 per tonne on onion exports from 28 October until 31 December this year. This measure aims to boost the availability of onions in the domestic market and control their prices.

The government on Friday extended the same restriction on onion exports, Reuters reported citing a government order.

The all-India retail price of onions increased 94.39% to Rs57.85 a kg on 29 November from Rs29.76 per kg a year ago, according to the government data.

There was an increase of 58% and 35% in prices of onions and tomatoes respectively in November over October, prompted by festive demand and lower output in Kharif season due to erratic rainfall conditions, according to a report by CRISIL.

A steep rise in prices of food essentials – wheat, rice, pulses, sugar, onions - in India in the past few months is a major concern for the Narendra Modi-led government, which will face voters in the general elections in April-May 2024.

The government had imposed an export duty of 40% on onions in August. However, that did not help in curtailing their exports substantially. Rampant under-invoicing of exports undermined the duty, prompting the government to scrap it and impose a minimum export price of $800 per tonne on onions.

This year, key onion exporters such as Egypt and Turkey had banned onion exports. Onion production in Pakistan is lower, while Holland has also resorted to imports.

Owing to recurring onion export bans enforced by the Indian government previously, India's portion in several significant export markets has dwindled drastically, dropping from 80% to as minimal as 30% in certain nations.

Unauthorized use or reproduction of The Finance Today content for commercial purposes is strictly prohibited.

Popular Article from Economy