The Indian government has removed minimum export price (MEP) thresholds for onion and basmati rice to boost exports and increase farmers’ income. The move also includes a reduction in the export duty on onion from 40% to 20%, effective September 14. The higher duty had been imposed on May 4.
These decisions, announced ahead of the assembly elections in Maharashtra and Haryana, aim to enhance agricultural export volumes and support farmers. Haryana, along with Punjab, is a major producer of basmati rice.
Commerce and Industry Minister Piyush Goyal said that the removal of the $950 per tonne MEP on basmati rice will help increase exports and farmers’ income. “It has been decided to remove the current minimum export price (MEP) of USD 950 MT for issuing Registration-cum-Allocation Certificates (RCAC) for export of Basmati Rice,” a communication from the Department of Commerce said.
The Agricultural and Processed Food Products Export Development Authority (APEDA) has been instructed to implement this decision immediately and to monitor export contracts to prevent unrealistic pricing.
In October 2023, the government had previously reduced the MEP for basmati rice from $1,200 per tonne due to concerns that high prices were affecting exports. The government had initially set the MEP to prevent the illegal export of non-basmati rice as basmati. India’s basmati rice exports totaled $5.9 billion in the 2023-24 fiscal year.
The Directorate General of Foreign Trade (DGFT) has also scrapped the MEP on onion, which had been set at $550 per tonne since May. Despite high retail prices, this move is intended to facilitate greater onion exports. The decision to remove the MEP on onion has been taken despite high retail prices of this key kitchen item.
India exported 2.6 lakh tonnes of onions till July of this fiscal year. The country had exported 16.07 lakh tonnes of onions in the last fiscal.
According to the Department of Consumer Affairs, the all-India average price of onion was Rs 50.83 per kg on Friday, with variations ranging from Rs 28 to Rs 83 per kg.
The government has also implemented measures to manage wheat prices by tightening stockholding limits for traders, wholesalers, and processors. These restrictions will be in effect until March 31, 2025, across all states and Union Territories.
(With agencies input)