Indian Onion Exporters Face Uphill Battle After Export Ban Lift
By ScanX News Team
India's onion export industry is struggling after the lifting of the export ban in May 2024. The ban, imposed in December 2023, was lifted with stringent conditions including a 40% export duty and a Minimum Export Price of $550 per metric ton. These restrictions have made Indian onions uncompetitive globally, resulting in loss of international clients and market share to China and Pakistan. Traditional buyers like Bangladesh have not placed orders. Exporters are seeking government support, requesting an increase in RoDTEP rates from 1.90% to 5.00%. Domestically, farmers are facing price crashes with onions selling at Rs 8-10/kg in major markets.
*this image is generated using AI for illustrative purposes only.
India's onion export industry is grappling with significant challenges following the lifting of the export ban in May 2024, more than a year after its imposition in December 2023. The aftermath of the ban has left exporters struggling to regain their footing in the global market.
Export Restrictions and Their Impact
The Indian government initially imposed a 40% export duty on onions in August 2023, followed by a complete ban in December 2023. These measures were implemented to control domestic prices. However, when the ban was lifted in May 2024, it came with stringent conditions:
- A 40% export duty
- A Minimum Export Price (MEP) of $550.00 per metric ton
These restrictions have rendered Indian onions uncompetitive in the global market, causing significant setbacks for exporters.
Loss of Market Share
The prolonged export ban has had severe consequences for Indian onion exporters:
- Loss of international clients
- China and Pakistan have captured a significant portion of the market share
- Traditional buyers like Bangladesh have not placed orders this year
Factors Affecting Demand
Several factors have contributed to the reduced demand for Indian onions:
Bangladesh
- Surplus domestic production
- Pending import permits
Sri Lanka
- Increased local production
- Reduced need for Indian onions
Exporters' Appeal for Support
Facing these challenges, Indian onion exporters are seeking government intervention:
- Request to increase RoDTEP (Remission of Duties and Taxes on Exported Products) rates from 1.90% to 5.00% temporarily
- This increase is aimed at making Indian onions more competitive in the global market
Domestic Market Woes
The export challenges have had a ripple effect on the domestic onion market:
- Farmers are experiencing price crashes
- Onions are selling at Rs 8.00-10.00/kg in major markets
- Surplus crops and limited export demand are contributing to the price decline
Industry Response
The Maharashtra Onion Producers Association has taken action:
- Approached the state government for intervention
- Seeking measures to prevent farmers from selling at losses
The onion export industry's current predicament highlights the delicate balance between domestic price control and maintaining a competitive edge in the global market. As exporters and farmers alike face significant challenges, the sector awaits further government action to revitalize India's position in the international onion trade.
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