Onion export ban will hit farmers and traders in election year

The sudden ban triggered protests across Nashik district which produces 70 per cent of the onion in Maharashtra – the capital of India’s onion production.

Image used for representation.(Express Illustration)

NEW DELHI: The banned exports of the onion by the government until 31 March next year is likely to impact farmers in the coming days.

"Export policy of onions is amended from free to prohibited till March 31, 2024," the Directorate General of Foreign Trade (DGFT) said in a notification.

The sudden ban triggered protests across Nashik district which produces 70 per cent of the onion in Maharashtra – the capital of India’s onion production. Farmers blocked the Mumbai-Agra highway at three places in Maharashtra. The export ban will soon hit farmers as the new onion harvest will start hitting the market from January onward.

However, the notification has exempted those traders who are already in the advanced stage of exporting of onion and with permission granted by the government to other countries based on their request.

Traders who already loaded onion on ships, vessels or ships arriving in port and consignment of onion handed over to customs before December 8 are exempted.

Earlier in August, the government had imposed a curb on the export of onions by increasing the 40% export duty up to December 31, 2023. Further on October 28, the government fixed the minimum export price of US $800 per metric tonne till 31 December.

“There was no such demand as the price of onion in control,” says Khandu Kaka Deore, president, of Nashik District Onion Traders Association (NDOTA). “It will immediately impact traders but soon it will translate into impacting farmers who will start bringing the new harvest in January” he further said.

The politically sensitive commodity consumed by almost every consumer is quite volatile. Experts say the acreage of onion has lagged which made the government take such a step.

“The onion farmers live in a peculiar predicament,” says Eknath Sanap, an onion farmer based in Pune.

“We are made to throw away our perishable produce once the price plummets and when an opportunity comes to reap benefits, the government imposes different restrictions to keep price under control,” he further added. The price of onion in Pune Mandi was around Rs 42-44 and after export, it dipped to around Rs 35.  

India had exported around one million metric tonnes of onion between April and August this year mostly to Bangladesh, Malaysia and UAE. The export ban move will make India lose its export market and it will take a few years to regain it.