India has unexpectedly extended its ban on onion exports indefinitely, a decision that is likely to worsen high prices in some international markets. India, being the world's largest exporter of onions, initially imposed the ban in December, with it scheduled to end on March 31.
However, the government announced late on Friday that the ban will remain in place until further notice.
Traders had anticipated the ban to be lifted, as local onion prices had significantly dropped since the export restrictions were imposed, and fresh supplies were coming in from this season's crop. In Maharashtra, the largest onion-producing state, wholesale onion prices plummeted from 4,500 rupees per 100 kg in December to 1,200 rupees per 100 kg.
The extension of the ban has particularly affected countries such as Bangladesh, Malaysia, Nepal, and the United Arab Emirates, which heavily rely on imports from India to meet their domestic onion demand. Many of these nations have been grappling with high onion prices since the ban was first imposed.
Traders estimate that India supplies more than half of all onion imports to Asian countries, owing to its shorter shipment times compared to competitors like China or Egypt.
India had set a record by exporting 2.5 million metric tons of onions in the financial year ending on March 31, 2023.
Follow us
