“The imposition of export duty on onions reflects our commitment to stabilize domestic prices and ensure a steady supply for our citizens.” – [Government Spokesperson]
In a bid to curb soaring onion prices and bolster supplies in the domestic market, the government has implemented a 40% duty on onion exports, effective until December 31, 2023.
The Finance Ministry, earlier today, issued a notification announcing the imposition of a 40% export duty on onions for the specified period.
The Ministry succinctly stated, Government imposes 40% duty on onion exports till December 31.
The introduction of this export duty comes in response to concerns over the potential rise in onion prices, particularly in the upcoming month of September.
On August 11, the central government initiated the release of onions from its buffer stock to manage the situation.
For the 2023-24 season, the central government had previously decided to maintain a buffer stock of 3 lakh tonnes of onions, following the maintenance of 2.51 lakh tonnes during the 2022-23 season. The buffer stock serves as a contingency measure to address exigencies and ensure price stability in case rates significantly rise during periods of lean supply.
Rohit Kumar Singh, Secretary of the Food and Public Distribution Department, convened a meeting with the Managing Directors of agricultural marketing agencies, namely the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers’ Federation of India Limited (NCCF), to finalize the operational aspects.
The strategy involves releasing onion stocks strategically in states or regions where retail prices surpass the all-India average. It also targets areas where price increases over the previous month and year exceed the defined threshold. Disposal methods include e-auctions and retail sales on e-commerce platforms, as outlined in a release from the food ministry.
Notably, the Rabi onion harvested between April and June contributes to 65% of India’s onion production, meeting consumer demand until the Kharif crop is harvested in October-November.
Typically, procured stocks are distributed through targeted open market sales, as well as to states, Union territories, and government agencies for retail outlet supplies during lean supply periods.
