India Imposes 40% Export Tax on Onions – Data Analysis

05 September 2023

India has introduced a 40% export tax on onions, leading to rising prices of the staple in the global market, particularly in countries like Nepal, Bangladesh, Malaysia, and Sri Lanka which are heavily dependent on Indian onions.  The heavy rainfall in July 2023 across critical onion-producing regions like Karnataka and Maharashtra led to damage to stored onion crops. India’s July inflation reached a 15-month peak of 7.44% primarily due to higher domestic food costs. Let’s discuss the Indian export market of onions.

How Much Onions India Exported to the World in 2022 and 2023?

India exported onions worth USD 269 million during the Jan-Jun period of 2022 which rose to USD 314 million in the same period of 2023. In the complete year of 2022, India’s exports of onions totaled USD 590 million.

Quarter-wise Analysis of India’s Exports of Onions

Quarterly, India exported onions the most in the first quarter of 2023 as compared to the previous quarters, however, the value of shipments went down in the second quarter of this year. Analyze India’s exports of onions from Q1 of 2022 to Q2 of 2023.

Month-wise Analysis of India Onion Exports

Check month-wise values of India’s exports of onions reported in 2022 and 2023 for better data visualization.

India’s Top 10 Export Destinations of Onions

As India introduced a 40% export tax to combat higher onion prices, market analysts said that the country’s protective measure to control the retail prices of onions will lead to an increase in prices in the countries where onion is imported from India. Here is the list of India’s top 10 export destinations of onions with their values reported in 2022 and the first half of 2023.

Nepal Faces Shortage of Onions

According to a report, Nepal has started to face an acute shortage of onions, days after neighbouring India slapped a 40% export tax on the vegetable. The move came amid anticipation of a price rise ahead of the festival season when demand for most commodities goes up. The cost of onions per kg was Rs 54 two weeks ago but now the retail price has gone up to Rs 100 per kg.

Besides Nepal, Bangladesh, Malaysia, Sri Lanka, and parts of West Asia will see a rise in onion prices as these countries rely on India for their onion supply.

India, the world’s fifth-largest economy currently grapples with higher prices of fruits, vegetables, and grains with tomatoes seeing a more than 300% surge due to unfavourable weather. The Indian government also suspended non-basmati white rice exports in July to ensure ample domestic supplies.