India frequently employs trade bans, quotas, tariffs, and duties to regulate domestic agricultural pricing. Typically, these tools are activated during price surges and relaxed when price drops jeopardize local producers.
Most recently, on April 1, 2025, India lifted a 20% export duty on onions to address weak export demand and falling prices. However, as of May 28, 2025, onion wholesale prices, according to Expana's price series 6P52, recorded a 32.4% quarterly drop and a 15.1% year-over-year decline to INR 20,973 per metric ton (approximately $251/mt). The removal of the export duty has not sufficiently eased the onion oversupply to stop the price decline seen in April and May.
This situation arises amid the ongoing Rabi harvest and a forecast by the Indian Agricultural Ministry of 28.9 million mt onion production for 2024/25, potentially a 19% year-on-year recovery from the 2023/24 production slump that prompted trade restrictions.
With continued price decreases, the Horticulture Produce Exporters' Association (HPEA) urged the government to boost export demand in April. They have requested a rate hike from 1.9% to 5% in the remission of duties and taxes on onion exports to improve exporters' competitive edge. Nevertheless, given the traditional supply contraction from May to October, prices are expected to stabilize and increase in the coming months. It appears unlikely that the government will introduce further tax reliefs on onion exports after recent duty removals.
On April 24, 2025, Indian officials implemented additional steps to reduce logistics costs for agricultural exports, including the removal of a transshipment permit fee, which market participants anticipate will reduce costs and save time for onion exports.
Source: Mintec/Expana