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India imposes 40% export duty on onions

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The ministry of finance aims to contain retail inflation caused by rising food prices.

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The scantiest rainfall in onion-growing states in India has created onion shortages in the domestic market. (AP pic)

NEW DELHI:
India, the world’s biggest exporter of onions, has imposed a 40% export duty on onions with immediate effect.

The additional duty will be in force until Dec 31.

The United Arab Emirates is among the biggest markets for Indian onions along with Bangladesh, Nepal, Malaysia, and Sri Lanka, Emirates News Agency reported.

The curbs on export have been prompted by the scantiest rainfall in a century this month in onion-growing states in India, which is creating onion shortages in the domestic market.

August is the peak season in India for onion harvesting. Pakistan, China, and Egypt are among the other global exporters of onions.

India’s ministry of finance, which imposed the new export duty, wants to contain retail inflation caused by rising prices of vegetables and other food items.

This is the second recent effort by India to contain retail inflation caused by food prices. Last month, India imposed a ban on non-basmati white rice. India accounts for about 40% of the world’s source of exported rice.

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