Dhaka: India lifted the ban on onion exports after six months on Saturday, May 4, but imposed a minimum export price (MEP) of USD 550 per tonne.

The Directorate General of Foreign Trade (DGFT) stated in a notification that the export policy of onions is now free, subject to the MEP of USD 550 per metric ton, effective immediately and until further notice.

The decision to lift the ban comes amidst ongoing Lok Sabha polls in onion-growing areas of Maharashtra, which holds the second-highest number of seats—49—after Uttar Pradesh (80).

Onion traders and farmers, particularly from Maharashtra, have been advocating for the ban’s removal, arguing that it would help farmers fetch better prices.

However, the government had been cautious, fearing that exporting this essential kitchen staple could cause a spike in domestic prices.

The main opposition party, Congress, had criticized Prime Minister Narendra Modi’s government last month for neglecting Maharashtra’s onion farmers affected by the export ban.

They highlighted their manifesto’s pledge for a predictable import-export policy to prevent sudden and detrimental measures affecting farmers.

India had initially imposed the export ban on onions until March 31 to curb rising domestic prices.

However, it allowed shipments based on central government permission to other countries upon their request. Last month, the export ban was extended until further notice.

Previously, India had imposed a minimum export price of $800 per tonne from October 28 to December 31, 2023, and a 40% duty on exports until the same date to stabilize domestic onion supplies.

According to official data from the First Advance Estimates, India’s onion production for 2023-24 is projected at approximately 254.73 lakh tonnes, a decrease from about 302.08 lakh tonnes the previous year.

This decline is mainly attributed to reduced production in key onion-growing states like Maharashtra, Karnataka, Andhra Pradesh, and Rajasthan.

On May 3, the Indian government reintroduced a 40% duty on onion exports to manage domestic supplies.