Onion export duty slash: Mixed reactions in India’s largest onion producing State

Mixed reactions in Maharashtra over Union government's decision to slash onion export duty, benefitting those with remaining stock.

At a time when the rabi produce of onion is almost coming to an end, there are mixed reactions in Maharashtra over the Union government’s decision to slash export duty on onion from 40% to 20%, and to scrap the $550 per tonne MEP. Poll-bound Maharashtra is the largest onion producing State in the country. Lasalgaon, Asia’s largest wholesale market for onion, is also in Maharashtra.

Meanwhile, the politicians rushed to seek credit for the move. The onion export ban in December 2023 and the subsequent high export duty on the crop had created unrest among onion farmers before the Lok Sabha elections.

“Last year, when the government had imposed a ban on onion export, the highest rate was ₹4,141 per quintal. The model rate was ₹3,600. Today, after the government has slashed the export duty, the highest rate is ₹4,951. The model rate is ₹4,700,” Narendra Savliram, secretary of APMC, Lasalgaon, the largest wholesale onion market in Asia, said.

Since the announcement, the model rate has risen by ₹500 per quintal.

Mr. Savliram said that the policy change will benefit those who still have the stock of onion. “Rabi onion is almost over. This will benefit only those people to some extent who have some stock. But if the policy continues, it will be beneficial for the early or late kharif crop of onion. Moreover, though the export duty has been slashed, international orders won’t come immediately because of it. It will take around a fortnight for the matter to stabilise and for getting orders from the importing countries,” he said.

He also said that once the buffer stock of five lakh metric tonnes is released in the domestic market, it will lead to the stabilisation of domestic rates.

“When is export essential? When the rate is ₹1,000 per quintal or when it is ₹4,000 per quintal?” Jaydatta Holkar, director of the market committees of Lasalgaon and Mumbai, asked.