India, the largest vegetable exporter in the world banned onion exports in December, 2023.
The most popular vegetables exported from India to the international market are green chillies, potato, brinjal, lemon, capcicum, carrot, tomato, and onion. Amidst ongoing crisis in the Red Sea, Indian exporters are currently taking the Cape of Good Hope route to Europe. Despite increasing the journey time and cost, Indian exporters were able to generate remarkable profits. In this article, we will discuss about the growth of Indian export sector as goods demand rises globally.
Indian government restricted onion exports in December, 2023 due to rise in price following insufficient production. The ban continued till March. As Lok Sabha Election is going on, Indian government lifted the ban on May 4, 2024, to keep the price below affordable limits. The government has also fixed a minimum export price (MEP) of USD 550 per tonne. Lifting the ban on onion export provided the sigh of relief to Indian farmers.
“More than 45,000 tonnes of onions have been exported since the ban was lifted, mainly to the Middle East and Bangladesh," Nidhi Khare, secretary in the consumer affairs ministry, told PTI.
According to initial estimates by the agriculture ministry, “The country’s onion production in the 2023-24 crop year will decline by 16 percent from the previous year to 25.47 million tonnes, due to lower production in key growing regions such as Maharashtra, Karnataka and Andhra Pradesh.”
Apart from that, low shelf life is an issue for onion. To prevent that, Indian government has been taking essential steps like stock preparation and increasing shelf life. According to a senior official: “Government plans to significantly increase irradiation of onions this fiscal to extend the shelf life of its buffer stocks. This low, regulated dose of radiation, which poses no health risk, prevents the onions from sprouting and makes them less perishable.”
“State agencies have started procurement of onions from the recent rabi (winter) crop to create a buffer stock of 5,00,000 tonnes for the current year,” Nidhi Khare confirmed.
Nidhi Khare mentioned: “The prediction of a good monsoon this year will ensure better sowing of kharif (summer) crops, including onions, from June onwards.”
“Last year, only 1,200 tonnes of onions were irradiated. This time, we want to increase irradiation to one lakh tonne," said Nidhi Khare. She said: “The government aims to procure a total of 5 lakh tonnes of onions in 2024-25 to build a buffer stock, compared to 6.46 lakh tonnes in the last fiscal.”
“India’s goods exports grew 11.86 per cent to $41.4 billion in February 2024 (year-on-year), the highest monthly export in the current fiscal so far, powered by sectors such as engineering goods, electronics, chemicals, pharmaceuticals and petroleum products despite adverse factors like the Red Sea disruptions, slowdown of Western economies and fall in commodity prices,” according to the Commerce Department.
During 2022-23, India’s goods export market increased nearly 7% (y-o-y) to $451.07 billion. Commerce Secretary Sunil Barthwal predicted growth in India's export sector: “By the WTO’s projections of a 3.3 per cent growth in world trade in 2025, one would expect that 2024-25 would be a good year for Indian exports.”
In 2024, the top export destinations for India are the USA, the UAE, Saudi Arab, the UK, Singapore, the Netherlands, South Africa, China and Bangladesh.
