India allows export of onions to Bangladesh

On September 18, 2020, the Directorate General of Foreign Trade lifted the ban on export of onions to other countries including Bangladesh. The decision was made after a long meeting with the Ministry of External Affairs and Commerce.

Highlights

The lift of Ban came after Bangladesh High Commission complained to India about price hike of onions in Bangladesh due to the ban. The price of onions in Bangladesh shot up over 50 percentage as India imposed ban on Exports.

What is the issue?

India recently decided to ban the export of onions to Bangladesh and certain other countries as the crop was damaged heavily due to excessive rains. This increased the prices of onions in Bangladesh up to 100 Taka per kilogram. This is nearly three times the normal price of onions in the country.

Bangladesh’s stand

Bangladesh produces 25.57 lakh tons of onions every year. The demand of onion in Bangladesh is 25 lakh tonnes. The country is self-sufficient in onions. However, large quantity of onions get spoilt as it is a perishable item. In order to make up the deficit Bangladesh turns to India. Apart from India, Bangladesh has now turned towards Turkey and Egypt to import onions.

What made India to impose the export ban?

India had imposed the ban as the prices in the retail onion markets shot up. This was mainly because the rains in the month of August damaged onion crops. These onions were to hit the market in early September. Also, the rains washed away stored onions in Gujarat, Madhya Pradesh and parts of Maharashtra. The demand for Indian onions is also rising from international market. India usually exports onions to Sri Lanka Bangladesh and Gulf countries.

Concerns of Bangladesh

Bangladesh has expressed a ‘deep concern’ with India for its sudden ban on export of onions. In January 2020, during the visit of Bangladesh Prime Minister Sheikh Hasina to India, the countries agreed that India will inform Bangladesh ahead of a possible ban.

Month: Current Affairs - September, 2020