The US and Japan have raised questions on India’s frequent ban on onion exports at the World Trade Organization (WTO), claiming that such sporadic and frequent bans without prior notification put importing countries in a difficult position.
Simultaneously, in Maharashtra onion growers have also demanded that the government draft a comprehensive policy on the import and export of onion, instead of taking ad hoc decisions.
Both US and Japan have asked India to clarify its actions and give reasons why it has not opted for an export quota, which would allow a certain amount for exports. At the meeting of WTO’s committee on agriculture last month both countries said India was requested to explain its onion exports prohibition. The sudden export ban had also drawn protests from onion farmers as well as neighbouring countries such as Bangladesh and Nepal that also depend heavily on Indian onions.
In September last year, the government had banned exports of all varieties of onions, anticipating a shortfall as exports shot up by 30 per cent in the April-July period. In October 2020, the commerce ministry partially eased the curbs, allowing exports of Bangalore rose onions and Krishnapuram onions up to 10,000 tonnes each with immediate effect. From 1 January 2021, the government lifted all restrictions on onion exports as prices starting to ease in the domestic market after the arrival of the new crop.
In FY20, India even imported onions worth $80 million from Afghanistan, Turkey and Egypt to cool prices. In FY21, India exported $378 million worth of onions, 15 per cent higher than the previous year. The top exporting destinations were Bangladesh ($101 million), Malaysia ($62 million), the United Arab Emirates ($44 million) and Sri Lanka ($42 million).
The four-month ban on shipments, coupled with the decline in demand due to the pandemic, has also lowered India’s onion export revenue to its lowest level in six years during the 2020-21 fiscal year. Last year’s sales volume recovered from the previous year, recording 14 per cent growth, but exports earnings fell by about 9 per cent to Rs 2,107 crore from a high of Rs 4,651 crore in 2016-17.