India has lifted the 40% duty on onion exports after four months and nine days in Bangladesh which is expected to increase imports and bring down onion prices in the local market.
The decision was communicated to Indian traders through a circular signed by Santosh Kumar Sarangi, Director General Foreign Trade (DGFT) in India, on Friday evening.
Indian exporters shared the notification with Bangladeshi importers, who anticipate that the removal of the duty will stabilize onion prices in Bangladesh.
Shahidul Islam and Mamunur Rashid, onion importers at Hili land port, said: "India halted onion exports for five months, citing a shortage and price hike in their domestic market. On May 4, 2024, India withdrew the ban but imposed a 40% export duty. Although onions were imported through the port, prices remained high in Bangladesh due to increased costs. As a result, importers turned to Egypt, Pakistan, and other countries as alternatives to Indian onions."
The importers added that rumours about the removal of the export duty had been circulating in recent days, and on Friday evening, Indian exporters confirmed the withdrawal through a circular. The withdrawal is expected to take effect from Sunday morning.
They believe that with the duty lifted, onion imports from India will rise, leading to a decrease in prices in Bangladesh.
Last year, on October 28, India raised the export price of onions to $800 per ton. Importers in Bangladesh continued to import onions at this price until December 7, when India announced an export ban, citing production disruptions due to floods.
The ban was initially set to last until March 31 this year but was extended indefinitely on March 23. India later lifted the ban on May 4 but imposed a 40% export duty, which has now been removed.
