The Centre has officially lifted the 20 per cent export duty on onions, effective from April 1, signaling a significant shift in policy designed to support farmers while ensuring affordability for consumers. This move, confirmed through a notification by the Department of Revenue, follows extensive discussions with the Department of Consumer Affairs, reflecting the government's efforts to balance domestic supply with export potential.
The export duty, first introduced on September 13, 2024, was part of a broader set of restrictions — including minimum export prices and an outright export ban — aimed at maintaining sufficient domestic onion stocks. These measures remained in effect for nearly five months, from December 8, 2023, to May 3, 2024, during which the government closely monitored both production and pricing trends.
Despite the restrictions, Indian onion exports remained remarkably strong. Data shows that exports reached 17.17 lakh metric tonnes (LMT) during the financial year 2023-24 and hit 11.65 LMT in 2024-25 up to March 18 alone. Monthly exports saw an impressive rise, climbing from 0.72 LMT in September 2024 to 1.85 LMT by January 2025, showcasing the resilience of the sector and the continued global demand for Indian onions.
The government justified the removal of export duties by emphasizing the need to ensure fair prices for farmers while safeguarding domestic consumers from price volatility. Officials noted that mandi and retail prices have softened recently, driven by the anticipated arrival of rabi crops in substantial volumes. Although mandi prices remain elevated compared to the same period last year, the all-India weighted average modal price has declined by 39 per cent. Retail prices have also shown a significant dip, falling by around 10 per cent over the last month.
Major onion trading hubs like Lasalgaon and Pimpalgaon have witnessed a surge in arrivals, contributing to the downward trend in prices. As of March 21, modal prices at Lasalgaon were recorded at Rs 1,330 per quintal, while Pimpalgaon reported Rs 1,325 per quintal — a promising sign of improved supply and market stability.
The Department of Agriculture and Farmers Welfare has forecasted an impressive boost in rabi onion production, estimating a total yield of 227 LMT this year — an 18 per cent rise from last year’s output of 192 LMT. Given that rabi onions account for 70-75 per cent of India’s total onion production, their availability is crucial in ensuring price stability until the kharif crop arrives around October or November. The anticipated rise in production is expected to further ease market prices in the coming months, providing relief to consumers while supporting farmers with better yields and market access.
This increase in production and the subsequent fall in prices follows a challenging period of supply constraints and high global prices that began in August 2023. The government's latest move to remove export duties not only supports farmers by opening up more export opportunities but also ensures domestic prices remain stable.
Industry experts believe this decision will make Indian onions more competitive in the international market, potentially unlocking new export avenues and strengthening India's position as a key player in the global onion trade. Countries that rely on Indian onions — particularly those in Southeast Asia, the Middle East, and Europe — may benefit from more affordable imports, further boosting demand.
Additionally, this policy shift aligns with the government’s broader strategy to modernize agricultural practices, enhance storage infrastructure, and improve supply chain efficiency. By encouraging exports while maintaining domestic affordability, the government aims to create a sustainable, resilient onion market that benefits both farmers and consumers.
Farmers' organizations have largely welcomed the move, viewing it as a step towards ensuring better returns for their produce after months of uncertainty. However, some stakeholders caution that continued monitoring of domestic prices is essential to prevent any sharp spikes, especially during the lean period before the next kharif crop arrives.
Looking ahead, policymakers remain focused on long-term solutions to stabilize onion prices, including expanding cold storage capacity, promoting dehydration technology, and diversifying crop production cycles. The removal of export duties, coupled with increased production and improved supply chains, is expected to contribute to a more balanced, resilient onion market that supports India’s farmers while keeping onions affordable for millions of households across the country.
