The Indian government received approval from the Election Commission to lift the ban on onion exports amid the ongoing implementation of the Model Code of Conduct (MCC) due to the Lok Sabha elections, according to government sources, as per PTI.
The Department of Revenue, under the finance ministry, was granted permission to resume onion exports, albeit with specific conditions including a 40% export duty and a minimum export price (MEP) of USD 550 per tonne.
The government has set the MEP at USD 550 per tonne, which translates to approximately ₹46 per kg.
Considering the export duty, the effective minimum price for shipments will be around USD 770 per tonne, or about ₹64 per kg.
The decision to lift the export ban was based on recommendations from the Department of Consumer Affairs, which monitors the availability and price situation of onions in the country.
The Indian government received approval from the Election Commission to lift the ban on onion exports amid the ongoing implementation of the Model Code of Conduct (MCC) due to the Lok Sabha elections, according to government sources, as per PTI. The Department of Revenue, under the finance ministry, was granted permission to resume onion exports, albeit with specific conditions including a 40% export duty and a minimum export price (MEP) of USD 550 per tonne.
This regulatory adjustment was announced on May 4, as the government lifted the ban on onion exports—a move that could significantly benefit a vast number of farmers, particularly in key onion-producing regions like Maharashtra, which are gearing up for the upcoming Lok Sabha polls.
The government has set the MEP at USD 550 per tonne, which translates to approximately ₹46 per kg. Considering the export duty, the effective minimum price for shipments will be around USD 770 per tonne, or about ₹64 per kg.
"The export policy of onions is amended from prohibited to free subject to MEP of USD 550 per metric tonne with immediate effect and until further orders," stated the directorate general of foreign trade (DGFT) in a notification on May 4. This followed the imposition of a 40% export duty by the finance ministry on May 3.
The decision to lift the export ban was based on recommendations from the Department of Consumer Affairs, which monitors the availability and price situation of onions in the country. Consumer Affairs Secretary Nidhi Khare on Saturday assured that the lifting of the ban would not lead to any price rise in retail markets.
"Prices will remain stable. If at all there is any increase, it should be very marginal," Khare explained, underscoring the government's commitment to balancing the interests of both consumers and farmers.
The move to reinstate onion exports comes after the ban was initially imposed on December 8 last year to control soaring retail prices amidst fears of a possible decline in production. Over the past few years, India has consistently exported between 17 lakh and 25 lakh tonnes of onions annually.
Khare also highlighted the comprehensive discussions and ground assessments that informed this decision, "The ban on onion exports has been removed from today (Saturday) because the supply situation is comfortable and prices are stable in both mandies as well as retail markets." She cited that the modal price at Lasalgaon mandi in Nashik was ₹15 per kg in April.
Reflecting on the broader agricultural strategy, Khare mentioned that "Lifting of the ban would also encourage the farmers to put more area under onions. The monsoon forecast is above normal," indicating a proactive approach to agricultural planning and market readiness.
This policy shift is crucial as it comes ahead of significant electoral engagements in major onion belts, aligning economic incentives with electoral strategies, thus showcasing the government's responsive governance framework aimed at supporting the agricultural sector while ensuring market stability.
(With Inputs from PTI)
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