Government bans export of all varieties of onions with immediate effect to curb prices in domestic market

In order to increase availability and curb prices in the domestic market, the government on Monday banned the export of all varieties of onions with immediate effect. "The export of all varieties of onions... Is prohibited with immediate effect," the Directorate General of Foreign Trade (DGFT) said in a notification. 

The DGFT, an arm of the commerce ministry, deals with exports and imports-related issues. 

The provisions under transitional arrangement shall not be applicable under this notification. In the national capital, onion prices were ruling at around Rs 40 per kilogram. Wholesale price inflation for onion stood at (-) 34.48 per cent in August.  

The major states to produce onion in India are: Maharashtra, Karnataka, Madhya Pradesh, Bihar and Gujarat, among others. It may be noted that 40 per cent of the country's total onion crop is produced in the kharif season and the rest during the rabi season. The kharif crop, however, cannot be stored. 

Notably, the decision came hours after official data showed that retail inflation softened slightly to 6.69 per cent in August as price rise in some food items eased, though wholesale inflation inched up to a five-month high of 0.16 per cent on costlier manufactured goods. The consumer price index (CPI) based retail inflation was at 6.73 per cent in July, which has been revised downwards from the earlier estimate of 6.93 per cent, as per data released by the National Statistical Office (NSO). 

Inflation in food articles during August stood at 3.84 per cent, led by vegetables and pulses at 7.03 per cent and 9.86 per cent, respectively. In egg, meat and fish segment, it was 6.23 per cent, according to a statement by the commerce and industry ministry.