Government imposes 40% duty on onion exports until the end of December.

Centre imposes 40% export duty on onions to control rising prices

New Delhi: The Centre has imposed a 40% export duty on onions until December 31 in an effort to curb the increase in prices. This decision comes amid reports that onion prices are expected to rise in September. The finance ministry issued a notification stating, “To improve the domestic availability of onions, the government imposes a 40% export duty on onions with immediate effect until December 31, 2023.”

The government had previously announced the release of 3 lakh tonnes of onion from its buffer stock to increase availability. The buffer stock, maintained under the Price Stabilisation Fund (PSF), consists of 2.51 lakh tonnes of onion from the just-completed rabi season. The buffer stock is used to meet any shortages during the lean supply season when onion rates rise significantly.

In addition to the export duty, the consumer affairs ministry is exploring storage technology for onions in collaboration with the Department of Atomic Energy and Bhabha Atomic Research Centre. This initiative aims to improve the storage capacity and reduce wastage of onions.

During the 2022-23 fiscal year, the government procured a record 2.51 lakh metric tonnes of onions from the Rabi-2022 crop under the PSF. These onions were released in major consumption centers between September 2022 and January 2023. The Rabi onion harvest, which takes place from April to June, accounts for 65% of India’s onion production and meets consumer demand until the Kharif crop is harvested in October-November.

The procured buffer stocks are typically released through targeted open market sales, as well as to states, Union territories, and government agencies for supplies through retail outlets during the lean supply season. The imposition of the export duty and the release of buffer stocks are part of the government’s efforts to stabilize onion prices and ensure sufficient domestic availability.