In a notable policy shift, the Indian government has decided to lift the ban on onion exports, permitting shipments to six neighboring countries, including the UAE and Bhutan. The Ministry of Consumer Affairs, Food & Public Distribution announced that India will export 99,150 tonnes of onions to Bangladesh, UAE, Bhutan, Bahrain, Mauritius, and Sri Lanka.
Moreover, India has authorized the export of 2,000 tonnes of white onions, specifically cultivated for markets in the Middle East and certain European countries.
The decision comes after India imposed a ban on onion exports on December 8, 2023, to ensure adequate domestic supply amidst lower estimates for the Kharif and Rabi crops in 2023-24 compared to the previous year.
The National Cooperative Exports Limited (NCEL) will oversee onion exports, sourcing onions from domestic markets through e-platforms at competitive prices. These onions will be supplied to designated agencies in destination countries at negotiated rates, with full payment made in advance.
As Maharashtra stands as the largest onion producer in India, it will play a pivotal role as the primary supplier of onions for export through NCEL.
However, it's noteworthy that the production cost of white onions is relatively higher due to increased seed costs, adoption of good agricultural practices (GAP), and compliance with strict maximum residue limits (MRL) requirements.
Looking forward, the government has set a procurement target of 5 lakh tonnes of onions from the Rabi crop 2024 under the Price Stabilization Fund (PSF) of the Department of Consumer Affairs. Central agencies like NCCF and NAFED are collaborating with local agencies such as FPOs/FPCs/PACs to support procurement, storage, and farmer registration for onion procurement.
This policy reversal is expected to significantly impact regional trade dynamics and reflects India's commitment to fostering economic cooperation with its neighboring countries.
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