Indian govt lifts onion export ban days before Nashik goes to polls

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian government has lifted the export ban on onions just days before the Nashik region, known as India’s highest onion-producing area, goes to polls.

The notification issued by the Union Government reads, “The export policy of Onions is amended from ‘prohibited’ to ‘free’ subject to minimum export prices of $550 per Metric Ton (MT) with immediate effect and until further orders.”

On Friday, the government issued a notification lifting the export ban, albeit with a 40% export duty in place.

This development has been welcomed by Nashik traders, who see it as a significant relief. Vikas Singh, an onion trader, told CNBC-TV18, “This announcement has led to a price drop in onions exported by Pakistan and other countries, which had taken over the market during India’s export restrictions. For the time being, this is a huge relief for us.”

In August 2023, the Union government imposed a 40% export duty on onions until December 31, 2023, aiming to control domestic market prices. This move faced strong opposition from traders and farmers in Nashik, leading to protests and  closures of key Agricultural Produce Market Committee (APMC) markets Lasalgaon and Pimpalgaon. Farmers and traders staged multiple protests opposing the decision, but it didn’t lead to any policy change.

Later, in December 2023, a complete onion export ban was enforced until March 2024. This decision caused significant distress among onion traders. CNBC-TV18 highligted substantial financial losses faced by farmers and traders in the Nashik region because of the export ban. Agitated farmers and traders claimed that the export ban could result in huge electoral loss for the ruling BJP in the 2024 Lok Sabha elections in Nashik and other onion-producing areas.

Last year’s export ban resulted in losses estimated at around ₹10,000 crore for traders, farmers, and other stakeholders in the onion industry. While this latest announcement is expected to provide relief, concerns remain regarding the 40% export duty, which continues to worry traders and farmers.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow