Government approves Onion export to 5 friendly countries

The government of India has allowed the export of onions to friendly countries such as Bangladesh, the United Arab Emirates, Bahrain, Mauritius, and Bhutan.The government, which banned the export of onions in December 2023, has accepted the request of these friendly countries for Indian onions. India was the largest exporter of onion in the world in 2022-23.

India has agreed to allow the export of 50,000 tonnes of onion to Bangladesh, 550 tonnes to Bhutan, 3,000 tonnes to Bahrain, 1,200 tonnes to Mauritius and 14,400 tonnes to the United Arab Emirates. These countries are dependent on Indian onions to meet their domestic consumption. The ban imposed on onion exports by the government of India led to the price of onion shooting up in these countries. With the ban imposed by the government of India, prices in these countries have skyrocketed, leading to inconvenience for both the people and the government.

Government steps to control the price of Onion 

• Onion is a key ingredient in Indian homes, and it is a politically sensitive agricultural commodity that has led to the fall of the government in India.
• The production of onions in India for the past two years has been adversely affected by climate-related events in the key onion-growing states of Maharashtra and Karnataka.
• To control the increasing price of onion, the government first imposed a 40 per cent export tax on onion in August 2023 to discourage its export. 
• In October 2023, the government imposed a minimum export price (MEP) of onion at $800/tonne to discourage exports and improve domestic supplies.
• However, when these measures failed to bring down the onion price in the domestic market, the government imposed a complete ban on onion exports in December 2023. One of the main reasons for the export ban was the expected decline in onion production during the rabi(winter) season. The government expects onion production to be 19.3 million tonnes during the rabi season 2023-24, a decline of 18% compared to last year's harvest.

Onion Season in India 

• Onions are grown in Rabi(winter season), Kharif, and late Kharif (summer/monsoon) season. The rabi season onion is harvested in April-May, while the Kharif crops are harvested around October to December.
• Around 72-75 per cent of onion production in India is during the rabi season.
• The onion produced during the kharif season does not have a long shell life and has a relatively high moisture content. Therefore, it is not used in building onion buffer stock in India.
• The onion harvested during the rabi season has a longer shelf life and is stocked by the government to ensure a year-long supply.

Government steps to build Onion buffer stock 

The government of India has set a target to procure 5 lakh tonnes of onion from the market to build a buffer stock for 2024-25. It has appointed NAFED(National Agricultural Cooperative Marketing Federation) and NCCF(National Consumer Cooperative Consumers Federation of India Limited) as the procurement agencies.

Onion Production in India 

• India is the second largest onion-growing country in the world after China. Onion is cultivated in almost all the states of India.
• Maharashtra is the largest producer, with a share of around 43%, followed by Madhya Pradesh (16%). Karnataka and Gujarat contribute around 9% of national production.
• India was the largest onion-exporting country in the world in  2022-23. It exported around 2.5 million tonnes of onion worth Rs. 4,522.79 crores or $ 561.38 million.
• In 2022-23, the major export destinations of  Indian onion, in chronological order, were Bangladesh, Malaysia, United Arab Emirates, Sri Lanka, Nepal, and Indonesia.