India's Onion Exports Duty Set to Relived Due to Strong Rabi Crop

The Indian government will remove the existing 20% export duty on onions from April 1, 2025, giving exporters a competitive edge again. Growers and exporters had requested the removal, as duties had significantly impacted their global market position.

Initially, India banned onion exports entirely in December 2023 due to production shortages caused by El Niño conditions. Later, the government imposed a 40% export duty in May 2024, reducing it to 20% in September. With the recent decision, onion exports will once again become duty-free.

Increased Rabi Crop Supports Duty Removal

The decision follows higher-than-expected onion production forecasts for the 2024-25 crop year, driven by a strong rabi harvest. As of March 18, India's onion exports in FY 2024-25 stood at 1.165 million tonnes, lower than the previous year’s 1.717 million tonnes, mainly due to the earlier five-month export ban.

Exports steadily increased monthly—from 72,000 tonnes in September 2024 to 185,000 tonnes in January 2025. The government previously set Minimum Export Prices (MEP) and retail price interventions, which have now ended, creating a more open market.

Domestic Prices Decline with New Harvest

Onion prices at domestic wholesale and retail markets eased in March as the new rabi crop began arriving. Prices in Maharashtra’s key onion markets like Lasalgaon and Pimpalgaon dropped notably throughout March.

Retail prices fell approximately 10% over the last month, and wholesale prices dropped about 39% compared to last year, stabilizing the domestic market and creating favorable export conditions.

Onion Production Estimates for 2024-25

Rabi onions account for about 70–75% of India’s annual onion production. The Department of Agriculture estimates the current season’s rabi crop at 22.7 million tonnes, up 18% from last year’s 19.2 million tonnes. This increase will likely sustain domestic supplies until the kharif harvest arrives around October-November.

The duty removal, combined with strong production, positions India’s onion exports favorably in global markets for the months ahead.