The Indian government has taken a significant step to stabilize onion prices by imposing restrictions on its export in domestic markets. As of May 4th, new regulations are in effect. According to reports, export tariffs have been increased, but this adjustment will not directly impact the general public.
Export Tariff Impact
The government has decided to impose a hefty 40% export tariff on onions. This decision was made to control rising prices, as a similar measure was taken last August when a 40% export duty was imposed on onion exports. This decision aims to prevent the adverse effects of escalating prices on the common people.
Previous Regulations
Last year, the government had imposed export duties until December 31, 2023. However, when onion prices continued to surge in domestic markets and there was no improvement in supply, the government completely banned onion exports. However, this ban was gradually lifted. It remains to be seen how long the government will reduce export tariffs this time.
Export to Six Neighbor Countries
During the ban on onion exports, India has obtained approval to send onion shipments to some neighboring countries. Last month, the central government announced that nearly 1 lakh tons of onions would be exported to six countries, including Bangladesh, the United Arab Emirates, Bhutan, Bahrain, Mauritius, and Sri Lanka. This export initiative aims to address the surplus onion stock in India while assisting neighboring countries in meeting their demands.
Other Trade Revisions
Apart from onions, the government has also made changes in other trade transactions. Chickpeas have been granted exemption from import duties, and the decision to increase the exemption on yellow peas imports has been made. These new regulations came into effect on May 4th.
The government’s decision to restrict onion exports and implement new trade regulations aims to stabilize onion prices in domestic markets and alleviate the burden on the common people. By prioritizing domestic needs while exploring export opportunities, the government seeks to strike a balance between national and international trade interests.