Special Correspondent :
The Indian government has authorized limited exports of onions to Bangladesh.
This decision comes as the government opted for a government-to-government approach for onion exports to Bangladesh and several other countries, as recommended by the Ministry of External Affairs.
According to a report by The Economic Times of India on Monday, India has granted permission for onion exports on a government-to-government basis to select nations, as disclosed by informed sources.
However, in a separate development, some major exporters reached out to the government on Sunday, proposing a regulated export policy instead of a complete ban.
They cautioned that unrestricted exports could trigger a notable surge in domestic onion prices. India, being the world’s second-largest exporter of onions, had imposed a ban on onion shipments from December 2023 to March 2024 due to escalating domestic prices and potential shortages, leading to a spike in onion prices in neighboring countries.
While one source mentioned that a limited quantity of onion exports has been permitted for bilateral purposes, a decision regarding lifting the complete ban on onion exports remains pending. Details regarding the exporting agency are yet to be confirmed.
Another source revealed that the government has sanctioned limited onion exports to countries including Bangladesh, Sri Lanka, Mauritius, Bahrain, Bhutan, and Nepal.
In response to escalating onion prices in August 2023, the finance ministry imposed a 40% export duty to curb shipments. However, this measure proved ineffective due to under-invoicing, prompting the imposition of a minimum export price of $800 per tonne effective October 28.
The crop damage caused by severe rain and hailstorms in areas like Nashik and Ahmednagar in Maharashtra led to a decline in onion arrivals during the peak season in November, resulting in inflated prices and ultimately, a ban on onion shipments from December 8.
Consequently, onion prices plummeted from over ?40 per kg to around ?13 in the wholesale markets of Nashik, the primary onion-growing region in India, triggering protests by onion farmers demanding the lift of the export ban.
Onions hold a 0.6 percentage points weightage in overall inflation and account for 10 percentage points in the vegetable basket. A surge in onion prices could escalate food inflation, posing concerns for the government ahead of the upcoming Lok Sabha elections.
In early February, a delegation of central government officials visited onion-growing regions in Maharashtra to assess the situation and make recommendations to the government regarding the export ban.
