“Indian Government Imposes 40% Export Duty on Onions to Curb Price Surge”

In an effort to counter the upward trajectory of onion prices, the Indian government has taken a significant step by imposing a 40% export duty on onions until December 31. This strategic move is in response to the apprehension of an impending price surge in onions, specifically projected for September. The Ministry of Finance has communicated this development via an official notification, elucidating that the immediate implementation of the export duty aims to augment the availability of onions within the domestic market. The duty will remain in effect until December 31, 2023.

To strengthen the onion supply chain within the country, the government had earlier disclosed its intention to release 3 lakh tonnes of onions from its established buffer stock. This buffer stock, administered under the Price Stabilisation Fund (PSF), had been maintained at a level of 2.51 lakh tonnes during the fiscal year 2022-23. The primary purpose of this stockpile is to ensure price stability in the event of a substantial escalation in onion prices during periods of constrained supply.

The onions constituting the buffer stock have been procured following the conclusion of the rabi season. Concurrently, the cultivation of kharif onions is presently underway, with the anticipation of harvests commencing in October. This multi-pronged approach underscores the government’s concerted efforts to manage and stabilize the onion market, thereby mitigating the potential adverse effects of price fluctuations and supply shortages on consumers and the broader economy.