The Indian government has announced the withdrawal of the 20% export duty on onions, set to take effect on April 1, 2025. This decision, unveiled on Saturday, March 22, 2025, reflects the government's commitment to maintaining fair prices for farmers while ensuring onions remain affordable for consumers.
The 20% export duty, first imposed on September 13, 2024, was introduced as part of a series of measures to control onion exports. These measures included not only export duties but also minimum export prices and outright bans to manage domestic supply effectively. In a notification issued by the Department of Revenue, the government highlighted that the move aims to restore order in the market during a critical period when onion prices have begun to drop due to the arrival of the rabi crop.
Despite stringent export restrictions imposed since December 8, 2023, total onion exports reached 17.17 lakh tonnes during the 2023-24 fiscal year. For the 2024-25 fiscal year, the quantity of onions exported up till March 18, 2025, stands at 11.65 lakh tonnes, a significant uptick compared to the initial export levels post-duty imposition.
The government indicated that the situation has evolved favorably over the months, with the monthly onion export quantity rising sharply from 0.72 lakh tonnes in September 2024 to 1.85 lakh tonnes in January 2025. This growth indicates a recovery in both production levels and market demand.
In the wake of favorable weather patterns and improved agricultural practices, this year's rabi onion production is forecasted to reach 227 lakh metric tonnes—more than 18% higher than the previous year's output of 192 lakh tonnes. Notably, rabi onions contribute approximately 70-75% of India’s total onion production, making them vital for stabilizing prices ahead of the kharif crop's arrival, which typically occurs between October and November.
As evidenced in recent reports, onion prices have seen a decline, with all-India weighted average modal prices dropping by 39% and average retail onion prices falling by 10% over the past month. The market has witnessed increasing arrivals in key locations, particularly in the Lasalgaon and Pimpalgaon markets, suggesting that both producer and consumer conditions are improving.
The Ministry of Consumer Affairs emphasized that this decision stands as a testament to the government’s dedication to ensuring farmers receive fair compensation for their products while simultaneously maintaining affordability for consumers. This policy shift provides a critical reprieve for consumers who have experienced fluctuating prices.
Officials noted that this easing of restrictions during the rabi harvest season comes at a pivotal time, promising to stabilize the market further with the anticipated high production levels of onions.
As the April 1 deadline approaches, various stakeholders within the agriculture sector are keenly watching how the removal of the export duty will influence both domestic onion prices and the livelihood of farmers. Many industry experts anticipate that this move will bolster smallholder farmers, enhance competition in the market, and foster overall economic stability in the agriculture sector.
This strategic decision reaffirms the government's focus on agricultural sustainability and a commitment to balancing farmer welfare with consumer interest. As farmers prepare for the upcoming harvesting season, their reactions to the easing of export duties will be crucial in shaping India's onion market.
Overall, the government’s proactive steps are viewed positively, hoping to lead to a more harmonious balance between supply and demand, ultimately benefiting both consumers and producers alike.
In summary, the withdrawal of the 20% export duty on onions marks a significant policy change in India's agricultural landscape, reflecting the government's responsiveness to changing market conditions and the need for sustainable agricultural practices.
