In a significant policy shift aimed at enhancing farmers' income and boosting exports, the Indian government has announced the removal of minimum export prices (MEP) for onion and basmati rice. Additionally, the export duty on onions has been halved from 40% to 20%, effective September 14, 2024. These changes come as part of the government’s efforts to promote outbound shipments and address the concerns of farmers.

The removal of the MEP, which had been set at USD 950 per tonne for basmati rice, will likely have a positive impact on export volumes. This decision follows a previous reduction of the MEP from USD 1,200 per tonne to USD 950 in October 2023, which aimed to mitigate the negative effects of high prices on exports. The removal of these thresholds, announced ahead of the assembly elections in Maharashtra and Haryana, is expected to stimulate the export market and provide relief to local producers.

Commerce and Industry Minister Piyush Goyal highlighted that this move will boost exports and improve farmers' incomes. The Department of Commerce has instructed the Agricultural and Processed Food Products Export Development Authority (APEDA) to immediately implement these changes and monitor export contracts to ensure fair pricing practices.

The MEP on onions, previously set at USD 550 per tonne, has also been lifted. This change is particularly notable given the current high retail prices of onions, with the All-India average price at Rs 50.83 per kg. Despite these high prices, the government has decided to remove the MEP to support farmers and encourage greater exports.

In addition to these measures, the government has also implemented restrictions on wheat stock holdings to prevent hoarding and control prices. These restrictions, which came into effect on June 24 and will remain until March 31, 2025, apply to traders, wholesalers, large retailers, and processors.

The decision to ease export restrictions for onions and basmati rice is expected to have a substantial impact on the agricultural sector. India, a major producer of both commodities, will benefit from increased export opportunities, which should help stabilize domestic prices and enhance the income of local farmers.

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