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Onion Export Duty: Mixed Reactions



  Aug 31, 2023

Onion Export Duty:Tears and Cheers


1. Why was a 40% duty imposed on onion exports?

The government imposed a 40% duty on onion exports to increase the availability of onions in the domestic market, especially before the festive season. The move aims to stabilize onion prices and mitigate the demand-supply mismatch.
 

2. Is there a demand-supply mismatch for onions?

Yes, there has been a demand-supply mismatch for onions due to factors such as unseasonal weather conditions, which affected the quality and shelf life of the crop. The reduction in shelf life of onions led to concerns about storage and panic selling among farmers.
 

3. Why is the government planning to offload buffer stocks of onions?

To reduce retail prices and stabilize the onion market, the government plans to release its onion buffer stocks into various wholesale markets. This strategy is aimed at increasing the supply of onions in the market.
 

4. What are the major onion-growing states in India?

Major onion-producing states in India include Maharashtra, which contributes 39% of the overall production, followed by Madhya Pradesh at 17%. Other significant onion-growing states include Karnataka, Gujarat, Bihar, Andhra Pradesh, Rajasthan, Haryana, and Telangana.
 

5. How has climate affected onion production?

Unseasonal weather conditions, including a rise in temperature and unseasonal rainfall, have affected onion production. Early maturity of the crop and reduced shelf life due to these conditions have led to a smaller-sized bulb and concerns about storage.
 

6. Does India export onions?

Yes, India is a significant exporter of onions. In 2022-23, India exported about 2.5 million tonnes of fresh onions. Major export destinations include Bangladesh, Malaysia, the UAE, Sri Lanka, Nepal, Indonesia, Qatar, Vietnam, Oman, and Kuwait.
 

7. What are the aims of imposing export duty and offloading buffer stocks?

The export duty and offloading of buffer stocks aim to benefit both farmers and consumers. Farmers are assured remunerative prices, while consumers have access to affordable onions due to increased availability in the market.
 

8. What criticisms have arisen regarding this policy?

Critics argue that the imposition of export duty could discourage onion farmers and traders from exporting, potentially affecting international trade relationships and India's reputation as a reliable supplier. Some also contend that such measures could lead to unintended consequences in the global onion market.


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