Government Removes 20% Export Duty on Onions to Boost Farmer Earnings and Global Trade
The Government of India has taken a significant step in favor of farmers by abolishing the 20% export duty on onions. Union Agriculture and Farmers’ Welfare Minister Shivraj Singh Chouhan announced that the Modi government is committed to ensuring remunerative prices for farmers while maintaining affordability for consumers. The decision to completely remove the export duty is aimed at boosting onion exports, allowing farmers to get better prices for their produce in global markets without any additional duty burden.
Previously, the government had imposed a 40% export duty on onions to regulate domestic supply and control inflation. However, as onion prices started declining, affecting farmers’ earnings, the government reduced the export duty from 40% to 20%. Now, with the latest decision to completely remove the export duty, the government aims to support farmers by enabling them to access international markets freely.
The Centre had earlier announced on March 22 that the 20% duty on onion exports would be withdrawn effective from April 1, and a notification to this effect was issued by the Department of Revenue on the recommendation of the Department of Consumer Affairs. Over the past few months, the government implemented several measures to ensure a stable domestic supply of onions, including imposing duties, setting a minimum export price (MEP), and even temporarily prohibiting exports for almost five months, from December 8, 2023, to May 3, 2024. The 20% export duty, which has now been abolished, was in place since September 13, 2024.
Despite these export restrictions, the total onion exports in the financial year 2023-24 stood at 17.17 lakh metric tonnes (LMT), and in FY 2024-25 (till March 18), exports reached 11.65 LMT. There has been a notable rise in onion exports over the past few months, increasing from 0.72 LMT in September 2024 to 1.85 LMT in January 2025, according to the Ministry of Consumer Affairs, Food and Public Distribution.
This move is expected to provide a major relief to onion farmers who have been facing price declines due to increased supply following the arrival of rabi crops. While mandi prices are still higher than those recorded in the same period in previous years, there has been a 39% drop in the all-India weighted average modal prices. Similarly, retail prices have seen a decline of 10% over the past month. The government’s decision to lift export restrictions will not only stabilize farmer incomes but also enhance India’s presence in the global onion market.
With this latest move, the Modi government once again demonstrates its commitment to ensuring farmers get fair and competitive prices for their produce while balancing domestic availability and affordability for consumers. The decision is expected to significantly impact the onion trade, benefiting both farmers and traders in the long run.
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