Centre withdraws 20% duty on Onion Export effective from April 1st, 2025

Newdelhi:22/3/25:The Government of India has withdrawn 20% duty on onion export, effective from 1^st April 2025. A notification to this effect was issued by the Department of Revenue today on the communication of Department of Consumer Affairs.

To ensure domestic availability, the government had taken measures to check export utilizing duty, minimum export price (MEP), and even to the extent of export prohibition for almost five months, from 8^th December 2023 till 3^rd May, 2024. The export duty of 20% which now stands removed has been in place from 13^th September, 2024.

Despite export restriction, the total onion export during FY 2023-24 was 17.17 LMT and FY 2024-25 (till 18^th March) was 11.65 LMT. Monthly onion export quantity had picked up from 0.72 LMT in September, 2024 to 1.85 LMT in January, 2025.

The decision stands as another testament to the government’s commitment to ensuring remunerative prices to farmers while maintaining the affordability of onion to consumers at this crucial juncture when both mandi and retail prices have softened following expected arrival of rabi crops in good quantities. Even though the current mandi prices are above the level during corresponding period of previous years, a decline of 39% is observed in the all-India weighted average modal prices. Similarly, all-India average retail prices recorded a decline of 10% over the past month.

Graph-1: Onion mandi and retail price trends

Onion arrival in benchmark markets Lasalgoan and Pimpalgaon have increased from this month which drive prices downward. The modal prices in Lasalgaon and Pimpalgoan on 21^st March, 2025 were Rs.1330/qtl and Rs.1325/qtl, respectively.

Graph 2: Arrivals and prices in Lasalgaon Mandi

Graph 3: Arrivals and prices in Pimpalgaon Mandi

As per the estimates of Department of Agriculture & Farmers Welfare, rabi production this year at 227 lakh metric tonnes (LMT) is over 18% higher than 192 LMT last year. The rabi onion which accounted for 70-75% of India’s total onion production is crucial for overall availability and stability in prices till the arrival of kharif crop from October/November onward. The estimated higher production this season is expected to further ease the market prices in coming months.

The emerging production and prices scenario came as welcome breather for the country which had to grapple with the twin issues of lower domestic production and high international prices from August, 2023.