Good News! Modi government takes a big decision on onion, 20 percent tax is removed

Onion Export Duty: The central government has officially removed 20 percent of the duty imposed on onion exports. This decision will be effective from 1 April 2025. The Revenue Department has issued this notification on the recommendation of the Department of Consumer Affairs. Onion exporters are expected to get a lot of relief from this step.

Why was duty imposed?

For some time, the government had taken tough steps to maintain the availability of onion in the domestic market and control prices. These included export duty, minimum export price (MEP) and complete export restrictions for some time. The ban remained in force for about 5 months from 8 December 2023 to 3 May 2024. The 20 per cent export duty was imposed on 13 September 2024, which has now been removed.

Increase in exports despite restrictions

However, despite the sanctions, India exported a lot of onion. A total of 17.17 lakh MT (LMT) onion was exported in the financial year 2023-24, while the financial year 2024-25 (till 18 March 2025) was exported 11.65 lakh MT onion.

Interestingly, the monthly exports reached 1.85 lakh MT by January 2025 as compared to 0.72 lakh metric tons in September 2024, which shows heavy global demand.

Relief to farmers and consumers

The decision to remove export duty shows the government’s efforts to give farmers a fair price and to keep onion prices stable for consumers. According to recent market data, the weighted average price of onion has fallen by 39 percent compared to last year. Also, in the last one month, onion prices have decreased by 10 percent in the retail market, which has given relief to consumers.

Rabi crop record production

According to the Department of Agriculture and Farmers Welfare, this year Rabi onions are estimated to be 227 lakh metric tonnes, which is 18 percent more than the previous year’s 192 lakh metric tonnes. Rabi onion, which is 70-75 per cent of India’s total onion production, plays an important role in keeping prices stable until the kharif crop comes in October-November.

This year, record production of Rabi crop will prove to be helpful in further stabilizing onion prices in the market in the coming months. This news is relieved for the country, because since August 2023, there were challenges due to decrease in domestic production and high prices in the international market. The removal of export duty will help onion exporters increase competition in the global market.

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