India Lifts 20% Export Duty on Onions Effective April 1
The Indian government has announced that it will lift the 20% export duty on onions from April 1, 2025. The decision comes as a response to improved domestic supply conditions and the anticipated arrival of a strong rabi onion harvest, which has already begun easing prices in the market.
Export Duty to End Amid Softening Prices
The export duty was first introduced on September 13, 2024, as a measure to ensure adequate domestic availability and to curb the rising prices of onions across the country. The move was part of a broader set of interventions, including minimum export price enforcement and temporary export bans, all aimed at stabilizing the market during periods of volatility.
However, with prices now on a downward trend and the rabi crop coming in strong, the government believes that market conditions are conducive to removing the export restrictions without negatively affecting consumers.
Onion Exports Continue Despite Duty
Despite the duty in place for several months, onion exports remained strong. India exported 17.17 lakh metric tonnes (LMT) of onions in 2023–24. In the current fiscal year up to March 18, 2025, the export volume already stands at 11.65 LMT. A consistent month-on-month increase has been noted, with exports growing from 0.72 LMT in September 2024 to 1.85 LMT in January 2025.
Rabi Harvest Expected to Stabilize Market
The Department of Agriculture & Farmers Welfare has projected a robust rabi harvest of around 227 LMT, an 18% rise over last year’s 192 LMT. As rabi onions account for 70–75% of India’s annual production and serve as the key supply until the next kharif crop in October–November, this boost in output is expected to support market stability and keep prices in check.
Prices in both wholesale and retail markets have already begun to reflect this increased supply. The all-India average modal mandi price has dropped by 39%, while average retail prices have seen a 10% decline over the past month.
Balancing Farmer Interests and Consumer Needs
The withdrawal of the export duty aligns with the government’s broader strategy to balance the needs of consumers and farmers. While previous curbs were aimed at controlling inflation, the easing of export restrictions now signals support for farmers seeking better prices through access to international markets.
The move is expected to offer relief to onion growers, especially in states like Maharashtra and Karnataka, by improving their earnings through global demand without causing undue stress on domestic prices. This measured approach reflects a commitment to ensuring fair value to farmers while safeguarding the interest of Indian consumers.
