The Union government has announced the removal of the 20% export duty on onions, effective from April 1, 2025. This decision brings much-needed relief to farmers who have been facing heavy losses since the end of 2023 due to export restrictions.
The export duty was first imposed in September 2024 after the government lifted a complete ban on onion exports, which had been in place from December 8, 2023, to May 3, 2024. The restrictions were initially meant to ensure a stable domestic supply and control onion prices for consumers. However, farmers, especially those from Maharashtra’s Lasalgaon—the largest onion market in Asia—have been protesting for months, demanding the removal of these curbs.
Onion prices have been dropping significantly, making it difficult for farmers to recover their production costs. The current market rates at key mandis like Lasalgaon and Pimpalgaon are around ₹1,330–₹1,325 per quintal, while the cost of cultivation is estimated at ₹2,200–₹2,500 per quintal. Despite the restrictions, India exported 17.17 lakh metric tonnes (LMT) of onions in the 2023–24 financial year and 11.65 LMT so far in 2024–25.
Rising onion production
The government’s decision comes as onion production has increased significantly. The Department of Agriculture & Farmers Welfare estimates rabi onion production at 22.7 million tonnes this year—18% higher than last year’s 19.2 million tonnes. Since rabi onions make up 70–75% of India’s total production and are crucial for supply stability, the higher yield is expected to further ease market prices in the coming months.
In a statement, the government highlighted that recent arrivals of onions in markets have driven prices down. Although mandi prices are currently higher than in previous years, the all-India weighted average modal price has dropped by 39%, while retail prices have declined by 10% in the past month.
This move is expected to provide relief to onion farmers while ensuring stable prices for consumers. Farmers now hope that lifting the duty will lead to better prices and improved earnings in the coming months.
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