India's government has imposed a ban on onion exports until March 31, 2024, ahead of the upcoming Lok Sabha elections, aiming to bolster domestic supply and regulate market prices.
The Directorate General of Foreign Trade (DGFT) issued a notification transforming the export policy of onions from 'free' to 'prohibited' until the specified date. However, the DGFT clarified that permission for onion exports may be granted to other countries based on their specific requests.
The directive permits the continuation of onion exports for consignments where shipping commenced before the notification and vessels had already berthed and anchored at Indian ports. Additionally, shipments that entered customs stations for exportation or were registered in electronic systems before December 8 are also allowed for exports.
For consignments handed over to customs or entered customs stations before the notification with verifiable evidence, the export period extends until January 5, 2024.
Amidst the ban, the market reflects onion prices ranging from ₹70 to ₹80 per kg in local markets of New Delhi. The government had previously initiated the sale of buffer onion stocks at a subsidized rate of ₹25 per kg in retail markets to alleviate consumer burden.
Previously, the Centre had implemented measures to control onion prices, including imposing a minimum export price (MEP) of $800 per tonne until December 31, and imposing a 40% export duty on onions until the same date.
India's onion exports between April 1 and August 4 this fiscal year amounted to 9.75 lakh tonnes, with Bangladesh, Malaysia, and the UAE ranking as the top three importing countries.
As the nation faces a fresh supply shock and reports indicate a shortfall in onion production during the ongoing kharif season, the move to restrict exports aims to curtail rising onion prices. Recent data from November 14's Wholesale Price Index (WPI) showed a 62.60% annual inflation rate in onions, contrasting with cooling rates for vegetables and potatoes at (-) 21.04% and (-) 29.27%, respectively.
The government's step to curb onion exports anticipates stabilizing market rates and ensuring adequate domestic availability of this essential kitchen staple in the coming months, aligning its strategies with impending electoral considerations.
