Shift in Onion Export Duty: A Comprehensive Look

In April 2025, the Government of India decided to remove a significant 20% duty on onion exports starting from that date. This decision was made to ensure domestic availability by reducing export prices and preventing prohibitions for almost five months. However, this came with some challenges:

Rationale Behind the Change: The government had already implemented measures to control external import pressures:

• Minimum Export Price (MEP): They reduced MEP to lower levels.
• Export Prohibition: Banned exports from December 8th, 2023, to May 3rd, 2024.

From September 13th, 2024, the duty was removed. Now, this is another commitment to ensure farmers receive remunerative prices while keeping onion affordable for consumers.

Export Numbers:

• FY 2023-24: Onion exports were 17.17 LMT (Low Modular Tons).
• FY 2024-25: Exports dropped to 11.65 LMT, rising from September 2024’s 0.72 LMT to January 2025’s 1.85 LMT.

Price Trends:

• All-India weighted average modal prices have seen a 39% decline.
• Retail prices over the past month have dropped by 10%.

Challenges and Rationale for Export Shift: Despite higher mandi prices, the situation remains manageable with:

• Rabi Production: Last year’s rabi onion production was 227 lakh LMT (Low Modular Tons), up by nearly 18% compared to last year. This increased supply is expected to ease market fluctuations.

Conclusion: The removal of the 20% duty marks a strategic move, though not without challenges. With rabi crop arrival in key markets, we look forward to more stable prices and better agricultural conditions for years to come.