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The Indian government has prolonged the prohibition on onion exports until the culmination of the fiscal year. This extension, announced by Consumer Affairs Secretary Rohit Kumar Singh to PTI on Tuesday, signifies the Centre’s resolve to maintain adequate supply levels and curb inflationary pressures in the market.
The recent move by the Centre echoes its stance from late 2023. On December 8, 2023, a notification from the Directorate General of Foreign Trade amended the export policy of onions from free to prohibited until March 31, 2024.
In October 2023, the Centre had opted to increase the sale of buffer onion stock at a subsidized rate of Rs 25 per kg in retail markets to alleviate consumer burden. Additionally, in August 2023, India had initially imposed a ban on onion exports until December 31, 2023.
Following reports of the Centre’s potential decision to lift the export ban on onions, wholesale onion prices surged by 40.62 per cent to Rs 1,800 per quintal on February 19 in Lasalgaon, the nation’s largest wholesale onion market, compared to Rs 1,280 per quintal on February 17.
Given the upcoming general elections in the next couple of months, it’s improbable that the ban will be lifted even after March 31. Sources indicate that rabi (winter) onion production is anticipated to be lower due to reduced area coverage, particularly in Maharashtra.
The Indian government’s decision to extend the prohibition on onion exports until the end of the fiscal year underscores its commitment to stabilizing supply levels and mitigating inflationary pressures in the market. This continuation of the ban aligns with the Centre’s previous actions and reflects the ongoing challenges faced in the agricultural sector, especially with regards to onion production. With the looming general elections and anticipated lower rabi onion production, the likelihood of lifting the export ban remains slim.
