Indian Onion Exports Lose Global Market Share to Cheaper Alternatives

Indian onions are rapidly losing ground in the global market, especially in Gulf countries, due to the 20% export duty imposed by the Indian government. This policy, while intended to stabilize domestic supply and prices, has led to a significant loss in export competitiveness, say traders and exporters.

Onion Buyers Turn to Other Countries

Several buyers in the Gulf region have shifted to cheaper sources like Pakistan, Egypt, Turkey, and Iran. Indian onion prices are currently around USD 0,42 per kg, while Pakistan offers onions at about USD 0,34 per kg, making them far more attractive in international markets.

High Production, But Low Returns for Farmers

Despite a 30% increase in production over last year, farmers aren’t reaping rewards. The government estimates onion output this year at 28.88 million tonnes, up from 24.27 million tonnes last year. Major growing states such as Maharashtra, Madhya Pradesh, Karnataka, and Tamil Nadu have reported healthy crops.

However, farmers are selling stored kharif onions at low prices. The current modal price for red onions has dropped by USD 0,04 per kg from last week, further squeezing farmer margins.

Market Unrest and Political Pressure

Exporters and traders are urging the government to withdraw the export duty. The 40% duty imposed in May 2024 was reduced to 20% in September, but industry leaders believe this is still too high. Kerala exporters plan to raise the issue at an upcoming meeting with the Directorate-General of Foreign Trade (DGFT).

Ajit Shah emphasized that these policy decisions are benefiting competing nations and hurting India’s long-standing position in the Gulf onion market.