India Increases Onion Export Tariffs, Impacting Nepali Markets

India has increased the tariff on onion exports with the aim of stopping exports. According to the international news agency Reuters, India has announced the imposition of an additional 40 percent export duty on onion exports, effective from Saturday.

Such a decision by India will inevitably lead to an increase in onion prices in the Nepali market. India has routinely restricted onion exports as the main festival season approaches.

The Central Board of Indirect Taxes and Customs (CBIC), under the Ministry of Finance of India, has raised the tariff on onion exports from 2 Bhadra to 15 Poush India holds the title of the world's largest onion exporter.

Government officials have cited the recent surge in domestic onion prices as the driving force behind this decision. India remains the primary source of onions for Nepal, with the country having imported 180 million kilograms of onions valued at 6.75 billion rupees from India last year.

Presently, onions are being traded at a wholesale price of Rs 61 per kilogram in the Nepali market. The Nepal Potato Onion Business Association has indicated that Nepal's market will indeed feel the repercussions of India's decision. Prakash Gajurel, the general secretary of the association, mentioned that the price of onions per kilogram is approximately 50 rupees.

India's imposition of export duties on onions will disrupt Nepal's value chain, ultimately leading to increased onion prices within Nepal. Given India's recurrent actions in this regard, it becomes imperative to consider boosting the domestic production of such essential commodities in Nepal itself.