With an aim of discouraging outbound shipments of onions due to rising prices in the domestic market, the government has removed incentives for export of fresh and chilled onions. The Directorate General of Foreign Trade (DGFT), an arm of the commerce ministry, has stated that it is withdrawing the benefits for exports of fresh and chilled onions. The rate at which Merchandise Exports from India Scheme (MEIS) benefits for exports of fresh and chilled onions is granted under the foreign trade policy has been made zero from the current 10% with immediate effect.
The decision of withdrawal of the incentives assumes significance as the Centre has started creating a buffer stock of 50,000 tonne of onion to check prices in the coming months in view of drought conditions in producing states. Wholesale prices at Lasalgaon in Maharashtra have shot up by about 48% to Rs 13.30 per kg on June 11 when compared to Rs 9 per kg on the same day last month. In the national capital, retail onion prices are ruling at Rs 20-25 per kg depending on the varieties.
As per the first estimate, onion production in the current 2018-19 crop year ending June is estimated to be slightly higher at 23.62 million tonne as against 23.26 million tonne in 2017-18. The government is expected to revise the estimate later factoring drought impact on production. India’s exports of fresh and chilled onion declined to $496.76 million in 2018-19 as against $511.52 million in 2016-17.
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