Much-awaited relief for onion farmers: Centre removes export restrictions

The 20 per cent duty on onion export, which has been causing price crash of the crop for farmers, will be withdrawn from next month, the Union government announced on March 22, 2025.

With the kitchen staple going without export restrictions after more than a year, farmers who have been facing losses since December 2023 can breathe a sigh of relief.

On December 8, 2023, the Union government banned onion exports to address domestic supply shortages and to ensure that the vegetable was available to domestic consumers at reasonable prices. Initially scheduled to end on March 31, 2024, the ban was extended indefinitely before being eventually lifted on May 4.

The ban was lifted as the Lok Sabha 2024 elections approached. But the minimum export price of onion was kept at $550 (Rs 45,884) per tonne, with a 40 per cent export duty. This was reduced to 20 per cent on September 13, 2024. 

The withdrawal of the duty will be effective from April 1, 2025, according to a notification issued by the Department of Revenue on the communication of Department of Consumer Affairs on March 22. 

Farmers, especially in Maharashtra, which has Asia’s largest onion market Lasalgaon, have been protesting since 2024 for removing the restrictions. 
While the initial ban in December 2023 was put in place to address domestic shortages, according to farmers, it should not had been extended beyond March as there was a sufficient crop in the subsequent months. And when the ban was lifted, there was no reasoning behind levying an export duty.

In a statement on Saturday, the government also said that onion arrival in benchmark markets Lasalgoan and Pimpalgaon has increased from this month, helping lower prices. The modal prices in Lasalgaon and Pimpalgoan on March, 21, 2025 were Rs 1,330 / quintal and Rs 1,325 / quintal, respectively.

This meant farmers were not even able to recover their production costs as the expense to cultivate a kilogramme of onions is Rs 2,200-2,500 per quintal on average. 

Even though the current mandi prices of onion were above the level during the corresponding period in previous years, a decline of 39 per cent was observed in the all-India weighted average modal prices, as per government data.  

Similarly, the all-India average retail prices recorded declined 10 per cent over the past one month.

Rabi production this year was 22.7 million tonnes, the Department of Agriculture & Farmers Welfare estimated. This is more than 18 per cent higher than 19.2 million tonnes produced last year.