Centre withdraws 20% export duty on onions, effective April 1

The central government announced on Saturday, March 22, that the 20 per cent export duty on onions will be withdrawn effective April 1, 2025, to protect farmers' interests amid softening prices. The duty was imposed in September 2024. The Department of Revenue issued the notification today following communication from the Department of Consumer Affairs.

"The decision stands as another testament to the government's commitment to ensuring remunerative prices to farmers while maintaining the affordability of onions to the consumers at this crucial juncture when both mandi and retail prices have softened following the expected arrival of rabi crops in good quantities," said the consumer affairs ministry today.

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India's onion exports: Key metrics

To ensure domestic availability, the government took measures to check exports through duty, minimum export price (MEP), and even export prohibition for almost five months, from December 8, 2023, to May 3, 2024.

The 20 per cent export duty, which has now been removed, has been in place since September 13, 2024. Despite export restrictions, total onion exports reached 1.17 million tonnes through March 18 of the current fiscal year.

In 2024-25 (till March 18), it was 11.65 lakh tonne. Monthly onion export volume increased from 72,000 tonnes in September to 185,000 in January.

“Even though the current mandi prices are above the level during the corresponding period of previous years, a decline of 39 per cent is observed in the all-India weighted average modal prices,” said the ministry.

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Onion prices in India

Onion prices have declined in key growing states over increased crop arrivals. On March 21, at Asia's biggest wholesale markets, Lasalgaon and Pimpalgaon in Maharashtra, prices were ₹1,330 per quintal and ₹1,325 per quintal.

All-India weighted average modal prices fell 39 per cent, while retail prices dropped 10 per cent over the past month. The agriculture ministry estimates rabi onion output to be 227 lakh metric tonnes tonnes this year, 18 per cent higher than last year's 192 lakh tonnes.

Rabi onion, accounting for 70-75 per cent of India's total production, is crucial for market stability until kharif crop arrivals begin in October-November. "The estimated higher production this season is expected to further ease market prices in coming months," the ministry noted.

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To ensure domestic availability, the government had previously implemented various export restrictions, including export prohibition from December 8, 2023, to May 3, 2024, before imposing the 20 per cent duty in September 2024, which has now been removed.