India has taken measures to stabilize domestic onion prices by imposing a 40% tax on onion exports. This move is intended to ensure an adequate supply of onions within the country and curb the potential threat of rising prices. The Union Ministry of Finance introduced this export duty through a customs notification, which will remain in effect until December 31, 2023.

Consumer Affairs Secretary Rohit Kumar Singh explained that the government’s decision to impose the 40% duty on onion exports is aimed at boosting the availability of onions in the domestic market, particularly in anticipation of the upcoming festival season. This move comes in response to a noticeable increase in onion exports in recent times.

Traditionally, the government has employed a minimum export price mechanism to regulate onion exports. However, this year marks the first instance of imposing an export duty as an effective measure to control outward shipments. Between April 1 and August 4, a total of 9.75 lakh tonnes of onions were exported from India. The major importing countries in terms of value include Bangladesh, Malaysia, and the UAE.

Data from the consumer affairs ministry reveals that the all-India average retail price of onions was Rs 30.72/kg on a particular Saturday, with prices varying between Rs 10/kg and Rs 63/kg. By implementing this export duty, the Indian government aims to stabilize onion prices in the domestic market and ensure a consistent supply of this essential food item during the festival season and beyond.