Over the past decade, India’s onion export market has undergone significant changes, with demand from the Middle East and Europe increasing while that of South Asia and Southeast Asia declined. This shift was driven by government interventions, price controls, and changing global trade dynamics.

Government Measures and Impact on Exports

In September 2024, the Indian government imposed a 20% export duty on onions to curb rising domestic prices. Prior measures, such as export bans and setting a minimum export price (MEP), failed to control inflation. High onion prices have historically been politically sensitive in India, even contributing to the fall of governments.

On March 22, 2025, the export duty was finally removed, after domestic supply stabilized. The Consumer Affairs Ministry stated that restrictions, including a five-month-long export prohibition from December 8, 2023, to May 3, 2024, were essential to maintaining domestic availability.

Middle East Gains, South Asia Declines

As per data, the Middle East accounted for 22.71% of India’s onion exports in 2023, a rise from 19.12% in 2013. Europe’s share also increased to 1% from 0.7% in the same period. On the other hand, South Asia’s share dropped significantly as key buyers like Bangladesh, Sri Lanka, and Malaysia reduced their import volumes.

UAE Becomes the Largest Importer of Indian Onions

The United Arab Emirates (UAE) emerged as the top importer of Indian onions in 2023, overtaking Bangladesh and Malaysia. Before the pandemic, the Middle East was closing in on South Asia’s import dominance. In 2019, the UAE accounted for 31.6% of India’s onion exports, while South Asia’s share shrank to 36.7% from 49.3% in 2013.

Pandemic Disruptions and Recovery

The COVID-19 pandemic disrupted global trade, affecting India’s onion export business. Initially, South Asia was the primary export destination, but logistical issues and policy changes forced India to diversify its markets. Europe, led by the UK, Greece, Italy, and Spain, also increased its onion imports from India, reaching 2.2% in 2023.

India’s Onion Inflation Concerns

Despite the export market's recovery, onion inflation remains a concern. In February 2025, onion inflation stood at 30%, up from 16% in January. On average, onion inflation in FY25 has been around 39%, prompting periodic government interventions to regulate prices.

India’s Onion Export Data and Revenue

• India exported 2.53 billion onions and shallots in 2023, up from 2.13 billion in 2022.

• Exports fell 65% in 2024 to just 0.9 billion onions due to government restrictions.

• In 2023, India exported $642 million worth of onions.

Future of India’s Onion Trade

With the removal of export duties, Indian onion traders expect a strong rebound in exports. Middle Eastern countries are likely to remain key buyers, with Europe’s share also gradually increasing. However, policymakers must strike a balance between export growth and domestic price stability to ensure fair benefits for both farmers and consumers.

For more financial market updates and IPO reviews, check out {Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi - https://financesaathi.com/ipo.php} and {Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News - Finance Saathi - https://financesaathi.com/}.

Join our {Trading with CA Abhay Telegram Channel - https://t.me/abhayvarn} for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & {Finance Saathi Telegram Channel - https://t.me/financesaathi} for Regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in {Choice Broking FinX - https://choiceindia.com/open-free-demat-account?=undefined&refercode=WlZY}.