India imposes 40% tariff on onion export till Dec 31
A senior government official said that the decision has been taken to increase the availability of onions in the domestic market especially in view of the upcoming festival season
The Union government on Saturday imposed a 40% tariff on export of onions till December 31 to restrict overseas sales, according to a notification. The move comes amid anticipation of price rise ahead of the festival season when demand for most commodities goes up.

The government has been battling high retail inflation, which soared to a 15-month high of 7.44% in July, led by food prices, latest available data show. On August 11, the Centre announced it would start releasing stocks of onion from State-owned reserves of 300,000 tonne to boost supplies.
“In order to increase the availability of onions in the domestic market especially in view of the upcoming festival season, the government has decided to impose a 40% duty on the export of onions. It was also being noticed that there was a sharp rise in exports in the recent past,” consumer affairs secretary Rohit Kumar Singh told HT.
Onion supplies are tightening in some markets and the kitchen staple could soon see an inflationary spell due to an annual lean season when stocks dip, wholesalers and analysts have said.
To stem rising cereal prices, the government had banned wheat export in May 2022. On July 20, 2023, it banned the export of rice, barring the premium basmati variety.
Indian consumers are particularly sensitive to onion prices relative to many other vegetables. Although production of the bulb has been adequate, heavy rain and flooding have damaged substantial quantities of stored onions in Maharashtra and Karnataka, which are major suppliers, traders said.
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“Farmers have reported a lot of damage to onion stocks, which are being attacked by fungi because of heavy rain, and supplies are less than before,” said Narendra Wadhwane, secretary of Lasalgoan agricultural market committee, Asia’s largest onion wholesale market in Maharashtra.
The consumer food inflation index in July leapt to 11.51% while vegetable prices rose by a whopping 37.34%. Tomato prices saw a massive 201.54% spike. Ginger prices shot up 177%, while garlic rates soared by 70%. Green chillies increased by 50%. Common greens, such as brinjal, okra, beans, pumpkin and cauliflower were also on the boil. Onion prices rose by 11.7%. Only potato and cabbage prices fell by 13.3% and 9%, respectively.
Unlike in tomatoes or most greens, whose elevated prices have pinched household budgets, in the case of onions, the government can intervene in markets to cool prices by releasing federally-held onion stocks when supplies show signs of bottoming out.
Tariff on the export of an item makes it dearer for importing nations, thereby discouraging sales abroad and boosting domestic availability.
The spike in inflation in July has been led by cereal and vegetable prices. Adverse weather has been the main driver of inflation since April. A late onset of the monsoon had delayed sowing of kharif or summer-sown crops. Then, in July, torrential rains led to widespread flooding. Two-thirds of India witnessed incessant rainfall through the month. This strained supplies, leading to higher vegetable prices.
Climate-change-induced extreme weather has contributed to the pressing shortage, experts have said. In 2022, abrupt rainfall followed by extreme heat led to an explosion in the numbers of plant viruses transmitted by aphids that feed on tomato plants in both Maharashtra and Karnataka, said M Krishna Reddy, a former scientist at the Indian Institute of Horticulture Research, Bengaluru. Such swings in weather in India are characteristic of climate change, the Intergovernmental Panel on Climate Change has repeatedly warned.
