Govt bans onion exports due to shortage in domestic markets

India is the world's biggest exporter of onions. Countries such as Bangladesh, Nepal, Malaysia, and Sri Lanka rely on Indian shipments.

New Delhi: The government on Monday (September 14) prohibited exports of onion, the government said in a notification, as prices rose in a month after excessive rainfall hit crops in southern states. The central government had banned all varieties of onion except those cut, sliced, or broken in powder form amid a shortage in supply.

“The export of all varieties of onion…is prohibited with immediate effect,” the Directorate General of Foreign Trade (DGFT) said in a notification. The ban includes Bangalore rose onions and Krishnapuram onions.

These varieties of onion were free for export till now.

“Rates have increased and there is a shortage of onion in the domestic market. While this shortage is seasonal, a huge amount of exports were done in the last few months during the Covid-19 pandemic,” said an official aware of the development.

India is the world's biggest exporter of onions, a staple of South Asian cooking. Countries such as Bangladesh, Nepal, Malaysia, and Sri Lanka rely on Indian shipments.

Wholesale prices in India's largest onion trading hub, Lasalgaon in the western state of Maharashtra, have nearly trebled in a month to 30,000 rupees ($408.52) per tonne.

Excessive rainfall in India's southern states of Karnataka and Andhra Pradesh has damaged summer-sown crop and delayed harvesting in other states, said Ajit Shah, president of the Mumbai-based Onion Exporters' Association.

The government had in March lifted nearly six-month-old ban on export of onions to help boost the income of farmers.

The government had in September last year banned the export of onion and imposed countrywide stock limits on onion to bring down prices of the key cooking ingredient.