India plans to levy a 40 percent export tariff on onions by December 31 to fight high prices with immediate effect. The Ministry of Finance announced on Saturday that this should improve the domestic availability of the vegetables. “The export tariff will make Indian onions more expensive than those from Pakistan, China and Egypt. This will of course result in lower exports and help bring down local prices,” said Ajit Shah, a Mumbai-based exporter.
The average wholesale price of onions in major markets rose nearly 20 percent to 2,400 rupees ($28.87) per 100 kilograms in July-August amid fears erratic rains could result in lower yields. Indian onion exports rose 63 percent year-on-year to 1.46 million tons in the first half of 2023. Countries like Bangladesh, Nepal, Malaysia, UAE and Sri Lanka depend on Indian supplies.
Onions are used throughout Asia as a base for traditional dishes. India surprised buyers last month by banning the sale of the widely available non-Basmati white rice in a bid to dampen price increases.