The Indian government has decided to withdraw the 20% export duty on onions starting from April 1, 2025. The decision, taken by the Union Ministry of Consumer Affairs, Food, and Public Distribution, aims to balance the interests of both farmers and consumers.
The export duty was initially imposed on September 13, 2024, to regulate domestic onion supply and prevent price fluctuations.
With onion prices stabilizing and the arrival of fresh rabi crops in the market, the Centre believes that removing the duty will support farmers by ensuring profitable prices while maintaining affordability for consumers.
Government’s Decision to Remove Onion Export Duty
The Centre’s decision to revoke the 20% export duty comes after several months of government intervention in the onion market. Over the past year, the government has taken various steps to regulate onion supply and prices, including:
- Minimum Export Price (MEP): The government fixed a minimum price at which onions could be exported to control excessive foreign sales.
- Export Prohibition: Onion exports were completely banned for nearly five months, from December 8, 2023, to May 3, 2024, to ensure sufficient domestic availability.
- Price Monitoring: The government continuously monitored mandi prices and retail prices before making any policy changes.
Impact of Onion Export Ban on Prices
The government’s strict control over onion exports played a crucial role in managing domestic prices. According to official data:
- The arrival of onions in major markets like Lasalgaon and Pimpalgaon (Nashik, Maharashtra) has increased significantly since March 2025.
- The modal price of onions in these benchmark markets stood at ₹1,330 per quintal in Lasalgaon and ₹1,325 per quintal in Pimpalgaon on March 21, 2025.
- The arrival of rabi crops in good quantities has further softened prices in both wholesale and retail markets.
Why is the Government Removing the Export Duty?
Several factors contributed to the Centre’s decision to lift the 20% export duty on onions:
1. Higher Domestic Supply
With the fresh arrival of rabi onions, domestic supply has improved significantly. The increased supply has led to a reduction in prices, allowing the government to ease export restrictions.
2. Ensuring Fair Prices for Farmers
Onion farmers have been demanding better prices for their produce. Due to the earlier export restrictions, farmers were forced to sell their produce at lower rates. Lifting the duty will allow them to access international markets and earn better profits.
3. Global Market Demand for Indian Onions
Indian onions are in high demand in international markets, especially in Bangladesh, Malaysia, UAE, and Sri Lanka. With the removal of export duty, India can regain its position as a leading onion exporter.
4. Balancing Consumer Affordability
The government’s decision comes at a time when onion prices have softened. By lifting the export duty, the government is ensuring that prices remain stable without burdening consumers.
Onion Prices in India: A Look at Recent Trends
The onion market has been volatile over the past year, with prices fluctuating due to various factors:
- September 2024: The government imposed a 20% export duty to prevent price surges.
- December 2023 to May 2024: Onion exports were completely banned to control domestic prices.
- March 2025: Increased arrivals of rabi onions have stabilized prices in wholesale markets.
With the removal of the export duty, onion prices may rise slightly in the coming months as demand from international markets increases. However, experts believe that ample domestic supply will prevent any major price spikes.
What This Means for Farmers and Traders?
The removal of the 20% export duty on onions is expected to benefit farmers, traders, and exporters in the following ways:
- Better Earnings for Farmers: With the opening of export markets, farmers can get higher prices for their produce.
- Increase in Onion Exports: India’s onion exports, which declined due to restrictions, are expected to rise again.
- Improved Trade Relations: The decision will strengthen trade relations with countries that rely on Indian onions.
Conclusion: A Strategic Move by the Government
The Centre’s move to withdraw the 20% duty on onion exports from April 1, 2025, is a well-balanced decision aimed at benefiting both farmers and consumers.
With a stable domestic supply and strong international demand, the onion market is expected to recover in the coming months.
This strategic step will ensure that farmers get fair prices, exports regain momentum, and consumers continue to enjoy affordable onions. The government’s continuous monitoring of the market will play a key role in maintaining stability in onion prices.
