The Indian government has announced a significant shift in its trade policy concerning onions, abolishing the 20% export duty that had been in place since September 2024. Union Agriculture Minister Shri Shivraj Singh Chouhan confirmed that this change will take effect on April 1, 2025, aiming to enhance the income of farmers while ensuring that consumers can access onions at reasonable prices.
In a statement made on March 24, 2025, Minister Chouhan emphasized, "The Modi government is a farmer-friendly government and giving remunerative prices to farmers, ensuring fair prices is its priority and commitment." This move follows a series of export restrictions that had been imposed to stabilize domestic supplies during periods of rising prices and increased demand.
The decision to remove the export duty is seen as a response to falling onion prices, which have pressured farmers' earnings. Previously, the government had gradually reduced the onion export duty from a high of 40% down to 20% as market conditions changed. The duty was initially levied as a measure to keep domestic markets stable, allowing the government to manage supply and demand dynamics effectively.
The Department of Consumer Affairs also released a statement supporting the policy change, asserting, "The decision stands as another testament to the government's commitment to ensuring remunerative prices to farmers while maintaining affordability of onions to consumers." This highlights a balancing act that the government strives for, catering both to the producers and the end consumers amid fluctuating market conditions.
Since the imposition of the 20% export duty, the government engaged in various strategies, including outright export bans and minimum export prices. Such measures extended from December 8, 2023, to May 3, 2024, seeking to ensure sufficient domestic availability of onions, a staple in Indian cuisine and a critical agricultural product.
Despite these restrictions, recent figures indicate that total onion exports reached 1.17 million tonnes as of mid-March 2025. This suggests that Indian farmers have continued to find avenues for their produce in international markets, managing to export effectively even under taxing conditions.
Onion prices have shown notable changes in key growing regions. As of March 21, 2025, average prices in major wholesale markets such as Lasalgaon and Pimpalgaon were reported at Rs 1,330 per quintal and Rs 1,325 per quintal respectively. Additionally, all-India weighted average modal prices have plunged by 39%, with retail prices dropping 10% over the past month, indicating a critical adjustment across the market landscape.
The removal of the export duty is expected to allow farmers to export their onions without incurring additional costs, thereby enabling them to secure fairer remuneration for their hard work. Minister Chouhan remarked, "There will be no duty on onion export so that the onion grown by our farmers with hard work reaches the global markets, and they can get better and remunerative prices"—a poignant reminder of the struggles and aspirations of India’s agricultural community.
The economic implications of this decision are vast, as it ties directly into the livelihoods of countless farmers who depend heavily on the sale of their produce. As the harvest season approaches, there is optimism that the international market will absorb Indian onions at favorable prices, benefiting both the agricultural sector and the economy at large.
This policy change, therefore, not only represents a shift in government stance towards agricultural exports but also underscores a broader commitment to revitalizing the rural economy and propelling India's agrarian commitment forward. With upcoming harvests and the expected influx of rabi crops into the markets, the government is taking measures that it believes will protect farmers' incomes while ensuring that consumers also enjoy affordable pricing.
As India steps into this new phase of onion export trade without the burden of duties, the hope is that these changes will resonate positively through the supply chain, enabling a stable, profitable, and equitable market for all players involved.
