India removes 20% tax on onion exports

India has started imposing a 20% export duty on onions from September 13, 2024, citing the need to ensure domestic supply. In addition to imposing high duties on onion exports, India has also implemented export checks through taxes, minimum export prices (MEPs) and even an export ban for nearly five months, from December 8, 2023 to May 3, 2024.

The Indian government said that the removal of 20% export duty is a further demonstration of the government's commitment to ensuring remunerative prices for farmers while keeping onion prices affordable for consumers at this critical time.

Workers load onions into a warehouse at the Ghazipur agricultural wholesale market in New Delhi in July 2024 (ANI)

Despite the export restrictions, India is expected to export around 1.71 million tonnes of onions in FY2023-24, compared to around 1.16 million tonnes in FY2024-25 (as of March 18). According to estimates by the Indian Ministry of Agriculture, this year’s rabi crop is estimated at 22.7 million tonnes, up nearly 18% from last year’s 19.2 million tonnes.

Rabi onions, which account for 70-75% of India's total onion production, are crucial due to ample supplies and price stability until the winter harvest begins in October and November. The higher estimated harvest this year will further reduce onion prices in the coming months, the regulator said.

India harvests about 28-30 million tonnes of onions annually and is one of the world's largest producers of the commodity. Indian onions are usually cultivated three times a year.