The Bangladesh crisis has compounded issues for Indian onion exporters, already struggling due to export restrictions and a 40% duty. Despite the border reopening, exports remain hampered, with losses of Rs 10,000 crore in 2023. Traders face continued uncertainty and potential further losses as the situation evolves.

The ongoing crisis in Bangladesh has intensified worries for Indian onion farmers and traders. The situation, already strained by various restrictions on this highly perishable commodity, has worsened due to the crisis in our neighbouring country.

India exports approximately 35% of its onion production to Bangladesh. Since August 2023, Indian onion farmers and traders have faced significant challenges. In response to anticipated price increases, the Indian government imposed a 40% export duty to stabilise domestic supply and prices. 

By December 2023, a complete export ban was introduced, which was only lifted in May 2024 with a 40% export duty and a USD 550 Minimum Export Price (MEP) per tonne.

These restrictions have severely impacted onion exports, causing a 50% decline in overall exports. In 2023 alone, the restrictions resulted in a loss of Rs 10,000 crore for stakeholders, including farmers, traders, and workers involved in sorting and packaging onions for export.

The current crisis in Bangladesh has exacerbated the situation. Bangladesh is a major trading partner for Indian onions. According to Indian government data, India exported 15.37 lakh tonnes of onions in 2021-22, with 6.58 lakh tonnes going to Bangladesh. 

In 2022-23, out of 25.25 lakh tonnes of onions exported, 6.71 lakh tonnes were sent to Bangladesh. In 2023-24, India exported 17.17 lakh tonnes of onions, with 7.24 lakh tonnes destined for Bangladesh.

Although the Indo-Bangladesh border has been reopened for trade, onion traders remain concerned that the situation is not fully under control, potentially leading to further losses.

Vikas Singh, Vice-President of the Horticulture Produce Exporters Association said that Bangladesh is an ideal export destination for India. The road connectivity ensures that our consignments reach Bangladesh within 1-4 days, which helps to manage transportation and export costs effectively.

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