February 20, 2017

To arrest steep fall in onion prices and protect farmers interest, government today decided to extend export duty benefits to onion for promoting its outbound shipments.

Wholesale prices at the Asia’s biggest onion market at Lasalgaon in Maharashtra have crashed to Rs 6 per kg today compared to Rs 48.50 per kg in the year-ago period, official data showed.

TradeIndia Research Onion1

The duty benefits for export of both fresh and stored onions would be available till December 31, Commerce and Industry Minister Nirmala Sitharaman said today.

“The Ministry of Commerce will provide 5 per cent MEIS (Merchandise Exports from India Scheme) for encouraging export of fresh/chilled onions. Available from now till 31 December 2016,” Sitharaman tweeted.

“Expected quantity of onions exported to be approx 3-3.5 lakh MTs (tonnes). Hopefully will help to export more onions from India,” she tweeted further.

Under the Merchandise Exports from India Scheme (MEIS), the government provides duty benefits at 2 per cent, 3 per cent and 5 per cent depending upon the product and country.

Onion prices have crashed due to estimated higher production at 202 lakh tonnes in 2015-16 crop year (July-June) as against 189 lakh tonnes in 2014-15 crop year.

TradeIndia Onion

Farmers in Maharashtra and Madhya Pradesh, which are among leading onion-producing states, have taken to distress sale of the bulb due to higher supply and unsold stock.

The situation has worsen to an extent that farmers in Nashik district have claimed that they got 5 paise per kg rate for their produce.

It may be noted that onion exports went up 33 per cent to Rs 2,362 crore in the first 11 months of 2015-16 on higher realization of sales.

India exported 10,86,072 tonnes of onion for Rs 2,010 crore in 2014-15.

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