Govt Scraps Onion Export Duty from April 1 – Big Relief for Farmers & Traders!

The government has announced the removal of the 20% export duty on onions starting April 1, benefiting farmers and exporters. The decision was made to ensure fair prices for farmers while keeping onions affordable for consumers. With the arrival of the rabi crop, onion prices have declined in both wholesale and retail markets. The all-India average modal price has dropped by 39%, while retail prices fell by 10% in the past month. Traders had expressed concerns about India losing its global market share due to export duties. The move follows a sharp drop in onion prices, with the most common market price falling from ₹2,270 to ₹1,420 per quintal in three weeks.

Govt Scraps Onion Export Duty from April 1 – Big Relief for Farmers & Traders!

In a significant move to support farmers and exporters, the government has announced the removal of the 20% export duty on onions, effective April 1. The decision, confirmed by the Revenue Department on Saturday, comes as a relief to agricultural communities and traders who had been urging authorities to ease export restrictions. This step aims to balance two priorities: ensuring fair prices for farmers and keeping onions affordable for consumers.

Why the Duty Was Removed

The Consumer Affairs Department explained that the timing of this decision aligns with the arrival of the new rabi (winter-harvested) onion crop. With fresh supplies entering the market, onion prices have already started declining at both wholesale and retail levels. Officials highlighted that lifting the export tax will enable farmers to sell their produce at better rates in international markets while preventing price crashes caused by an oversupply domestically.

Over the past three weeks, the average wholesale price of onions across major markets dropped sharply from ₹2,270 to ₹1,420 per quintal (100 kg)—a steep decline of ₹850 per quintal. Retail prices have also softened by 10% in the last month. Despite this, current wholesale rates remain higher than those recorded during the same period last year. However, the government emphasized that the all-India average modal price (the most frequently occurring price in markets) has decreased by 39%, signaling improved supply conditions.

Addressing Global Competition

Traders had repeatedly warned that India’s high export duties were making its onions uncompetitive in global markets. Countries like Pakistan, China, and Egypt had begun filling the gap, causing India to lose its foothold in key regions such as Asia and the Middle East. By eliminating the tax, the government hopes to reclaim its position as a leading onion exporter and stabilize domestic prices through increased overseas sales.

Impact on Farmers and Consumers

Farmers, particularly in states like Maharashtra, Karnataka, and Madhya Pradesh, had faced financial strain due to last year’s export restrictions and fluctuating prices. Many argued that export bans and high duties during peak harvest seasons forced them to sell at lower rates, reducing their earnings. The new policy is expected to empower them to tap into international demand without the burden of taxes.

For consumers, the government assures that removing the duty will not cause shortages or price spikes. The influx of the rabi crop has already strengthened domestic supplies, and officials are closely monitoring price trends to prevent volatility. Affordable onions are essential in India, where the vegetable is a dietary staple and price hikes often trigger public concern.

Looking Ahead

While the decision has been welcomed, some experts caution that global demand and domestic production trends require careful monitoring. Unchecked exports could reduce local availability if yields drop unexpectedly due to factors such as unseasonal rain or pests. However, the government has expressed confidence in current stock levels and the rabi crop’s output.

This move also reflects a broader strategy to ease agricultural trade barriers. In the past, India had imposed export duties and even temporary bans on onion shipments to curb inflation. With prices now stabilizing, authorities are shifting their focus to supporting farmers and rebuilding export ties.

Conclusion

The removal of the onion export duty marks a victory for farmers seeking better returns and exporters aiming to regain lost market share. At the same time, it highlights the government’s effort to strike a balance between producer welfare and consumer affordability. As fresh crops enter the market and global trade resumes, stakeholders will closely observe the policy’s impact to ensure it meets its objectives without unintended consequences. For now, the move signals a proactive approach to addressing the challenges faced by India’s agricultural sector.