India eases Onion Export Restrictions to UAE and Sri Lanka

India has permitted a restricted amount of onion exports to the United Arab Emirates (UAE) and Sri Lanka, during a period when the export of this essential vegetable has been under stringent limitations.

The Ministry of Commerce and Industry, via the Directorate General of Foreign Trade (DGFT), released a notification late Monday evening. It authorizes the export of an additional 10,000 metric tons (MT) of onions to the UAE, exceeding the previously permitted 24,000 tons, and 10,000 tons to Sri Lanka, coordinated by the National Cooperative Exports Limited (NCEL).

In March, the government permitted the export of 50,000 tonnes of onions to Bangladesh. The ban on onion exports has been extended indefinitely. Initially, India had prohibited onion exports until March 2024 in early December 2023. However, the DGFT notification stated that exports could be allowed if the central government grants permission to other countries upon their request.

In August, the government introduced a 40 percent duty on onion exports to curb price increases and enhance domestic supply until December 31, 2023. Following this, the central government established a Minimum Export Price (MEP) of USD 800 per tonne for onion exports on a free-on-board basis, effective from October 29.

The central government has exempted the export of ‘Bangalore rose onion’ from export duty. However, there is a condition: goods intended for export can only be exported if the exporter provides a certificate from the Horticulture Commissioner of the Government of Karnataka, verifying the item and quantity of Bangalore Rose Onion to be exported.

The ‘Bangalore rose onion’, a variety grown in the vicinity of Bengaluru, Karnataka, received the prestigious Geographical Indication tag in 2015. In response to escalating onion prices, the central government has initiated the release of this essential vegetable from its buffer stock.

The central government had previously resolved to maintain a buffer stock of 3 lakh tonnes of onions for the 2023-24 season. This is an increase from the 2.51 lakh tonnes of onions that were kept as buffer stock in the 2022-23 season.

Buffer stock is kept to address emergencies and stabilize prices if rates rise markedly during the lean supply season. The Rabi onion, harvested from April to June, constitutes 65 percent of India’s onion production and satisfies consumer demand until the Kharif crop is harvested in October-November.