India to scrap 20% onion export duty from April 1

The Indian Government has decided to scrap the 20 per cent export duty on onions from April 1. A government press release said the Department of Revenue has issued a notification in this regard. The Centre banned exports of onion on December 8, 2023, following a sharp drop in production due to El Nino weather. Before the elections, it lifted the ban and imposed a 40 per cent export duty on May 3, 2024. This was cut to 20 per cent on September 13, 2024.

The scrapping of the duty follows requests from exporters and growers since India was losing its market share in the global market due to the export duty. Also, onion production has been estimated higher during the current crop year to June. 

On the request of the Department of Consumer Affairs, the Department of Revenue on Saturday issued the necessary notification, abolishing 20 per cent duty on onion export, effective from April 1, the government statement said. It also said that despite export restrictions earlier and duty, onion export during FY 2024-25 (till March 18) was 11.65 lakh tonnes (lt) as against 17.17 lt in whole of FY24. Monthly onion export quantity had picked up from 0.72 lt in September, 2024 to 1.85 lt in January, 2025, it added.

Export was completely prohibited for almost five months -- from December 8, 2023 to May 3, 2024 -- to ensure domestic availability amid a surge in domestic prices. The government had taken several measures since 2023 to check exports, by fixing a minimum export price (MEP), which later was withdrawn, clamping 40 per cent export duty that was reduced to 20per cent in September last year and selling onion to retail consumers at various rates Rs 25-50/kg.

“The decision stands as another testament to the government’s commitment to ensuring remunerative prices to farmers while maintaining affordability of onion to the consumers at this crucial juncture when both mandi and retail prices have soften following expected arrival of rabi crops in good quantities,” the statement said. It also said that there was 10 per cent decline in the all-India average retail prices over the past one month and 39 per cent fall in the current mandi prices over year-ago period. With the arrival of freshly harvested Rabi-grown onion in Maharashtra’s Lasalgoan and Pimpalgaon, the modal prices were about Rs 1325-1330/quintal on March 21, as against about ₹2,270/quintal at the beginning of this month. As per the estimates of Department of Agriculture and Farmers Welfare, rabi production of onion, which has 70-75 per cent share in India’s total onion output, is likely to be 227 lakh lt this year, up by 18 per cent from 192 lt year-ago.

 The rabi onion meets the demand till the arrival of kharif crop from October/November onward. “The estimated higher production this season is expected to further ease the market prices in coming months,” the government said.