Government bans export of onions with immediate effect

The Union Government on September 14, 2020 banned the export of onions with immediate effect. The order bans export of all varieties of onions except cut, sliced onions or onions broken in powder form. 

The ban also covers Bangalore Rose onions and Krishnapuram onions, which were free for export till now. A notification was issued in this regard by the Directorate General of Foreign Trade under the Union Ministry of Commerce and Industry. 

The notification read that the provisions under the Transitional Agreement shall not be applicable under this notification.

Government bans export of onions with immediate effect pic.twitter.com/BuAdFAGSpK

— ANI (@ANI) September 14, 2020

Why has the government banned the export of onions?

• The government has reportedly banned the export of onions to increase domestic supply and reduce prices. The retail price of onion currently stands at Rs 40 per kg in the national capital.

• According to Ajit Shah, President of Onion Exporters' Association, excessive rainfall in the southern states of Karnataka and Andhra Pradesh damaged the summer-sown onion crop and delayed harvesting in other states.

• Overall, 40 percent of India's total onion crop is produced in the Kharif season and the rest during the rabi season. However, the Kharif crop cannot be stored.

Background

The Indian government had similarly banned the export of onions in September 2019 to bring down onion prices that had risen to almost Rs 80 per kg in Delhi due to disruptions in onion supply after floods in certain states. Later in December 2019, the onion prices skyrocketed to almost Rs 160 per kg in some parts of the country. 

The Government lifted the curbs after almost five months in March 2020 after the arrival of the Rabi crop made up for the shortage in onion supply caused by the flood-hit Kharif crop.