The crisis in Bangladesh has escalated concerns among Indian onion growers and traders. The already challenging situation, due to restrictions on this highly perishable product, has been further complicated by the turmoil in the neighboring nation. India, which exports about 35% of its onion output to Bangladesh, finds the country an ideal market primarily because of the efficient road connectivity that allows shipments to be delivered within 1–4 days, facilitating cost-effective transportation and export processes.
Since August 2023, the Indian onion sector has encountered numerous hurdles. The government introduced a 40% export duty and later imposed a complete export ban by December 2023, which was not lifted until May 2024, when the export duty was reinstated alongside a $550 Minimum Export Price per tonne. These measures have led to a significant reduction in onion exports, with a 50% drop in overall exports and a financial loss of ₹10,000 crore for the stakeholders in 2023.
Amidst these challenges, the situation in Bangladesh has added to the woes of Indian exporters. Bangladesh, being a key recipient of Indian onions, received 671,000 tonnes out of 2,525,000 tonnes exported by India in 2022-23, and 724,000 tonnes out of 1,717,000 tonnes in 2023-24. The closure and subsequent reopening of the Indo-Bangladesh border have caused delays and uncertainties for traders, with some trucks being stuck at the border due to the political instability following Sheikh Hasina's exit.
Exporters are now hesitant to send more consignments, fearing further disruptions. The ongoing crisis, coupled with the export restrictions, has not only resulted in financial losses but also allowed competitors like China and Pakistan to capture market share, further straining the Indian onion export business.
[ ₹100 = €1.10 ]
Source: cnbctv18.com