In a major relief to farmers and exporters, the Indian government has decided to remove the 20% export duty on onions, effective April 1. This move aims to provide much-needed support to farmers who have been grappling with falling prices due to a bumper rabi harvest.
The export duty, which was introduced on September 13, 2024, was part of a series of measures to control onion prices and ensure adequate domestic supply. However, with the expected influx of a strong rabi crop, wholesale market prices (mandi prices) have dropped significantly, prompting the government to reevaluate the export tax.
In an official statement, the Department of Consumer Affairs emphasized that the government is committed to balancing the interests of both farmers and consumers. The statement read, “This decision reaffirms the government’s dedication to ensuring fair prices for farmers while also making sure onions remain affordable for consumers at a time when prices in both wholesale and retail markets have softened due to the abundant rabi crop.”
Recent reports indicate a 39% drop in all-India weighted average modal prices, while retail onion prices have fallen by 10% over the past month. This price dip, attributed to increased supply from the rabi harvest, has raised concerns about the financial wellbeing of farmers.
With the removal of the export duty, Indian onions are expected to become more competitive in the international market, potentially boosting exports and providing relief to farmers. This policy shift highlights the government’s proactive approach in addressing challenges faced by the agricultural sector and its efforts to protect farmers’ livelihoods during periods of price volatility.
