Govt withdraws 20% export duty on onion effective April 1

New Delhi: The government on Saturday announced the withdrawal of 20 per cent export duty on onions effective from April 1, aiming to protect farmers' interests amid softening prices.

The Department of Revenue issued a notification following communication from the Department of Consumer Affairs, according to an official statement.

"The decision stands as another testament to the government's commitment to ensuring remunerative prices to farmers while maintaining affordability of onions to consumers," the consumer affairs ministry said.

The export duty had been in place since September 2024. Despite export restrictions, total onion exports reached 1.17 million tonnes through March 18 of the current fiscal year.

Monthly onion export volume increased from 72,000 tonnes in September 2024 to 185,000 tonnes in January this year.

Onion prices have declined in key growing states due to increased crop arrivals. At Asia's biggest wholesale markets, Lasalgaon and Pimpalgaon in Maharashtra, prices were ruling at Rs 1,330 per quintal and Rs 1,325 per quintal, respectively, on March 21.

All-India weighted average modal prices fell 39 per cent while retail prices dropped 10 per cent over the past month, the ministry reported.

The agriculture ministry estimates rabi onion output at 22.7 million tonnes this year, 18 per cent higher than the previous year's 19.2 million 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.

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 that has now been removed.