New Delhi: The Centre's decision to remove export duty on onions has brought mixed reactions from experts.
In a significant move on Friday, the Narendra Modi-led government announced the removal of export duty on onions. The decision comes at a crucial time as Maharashtra, the country's largest onion-producing state, gears up for upcoming Assembly elections.
The government's latest move is widely seen as an attempt to regain favour with onion farmers and prevent the opposition Mahavikas Aghdhi from leveraging the issue during the Assembly elections. The removal of the minimum export price of $550 per tonne is expected to give a significant boost to onion exports.
Union Commerce and Industry Minister Piyush Goyal has expressed optimism, claiming this decision will lead to increased exports and higher production by farmers.
However, the response to this policy change has been mixed. Experts have voiced varied opinions on its potential impact. Reacting to ETV Bharat, former Chief Statistician of India, Pronab Sen, and Madan Sabnavis, Chief Economist at Bank of Baroda, concur that farmers are likely to be the primary beneficiaries of this policy change. They suggested that farmers can now export at competitive prices and potentially see improved returns.
But, according to them, consumers may not see immediate benefits. Sabnavis warns that onion prices could trend upward shortly due to increased exports.
The decision aligns with the government's standard practice of adjusting export policies based on domestic supply estimates. With sufficient onion availability projected, the government has chosen to open up the export market.
Despite the potential benefits, the decision has not been without its critics. Onion growers argue that the decision comes too late in the season, with only 40-45 per cent of the crop remaining for export. This timing issue could potentially limit the full impact of the policy change.
Furthermore, the Maharashtra Onion Producers Association has called for more comprehensive measures. They're demanding the removal of all restrictions on onion exports, including clarity on the existing 40% export duty. This response indicates that while the current decision is welcomed, some stakeholders believe it doesn't go far enough.
