Nepal Faces Onion Shortage After India Imposes 40% Export Duty

KATHMANDU, (IANS) – Nepal is facing an onion shortage after India imposed a 40 percent export duty on the commodity.

Since August 22, the Kalimati Fruit and Vegetable Market in Kathmandu wiped onion off its price list after exporters stopped importing onion from India.

“We have 80 vendors that sell out onions but in the last two days, they are running out of the onion stock so we have wiped off the price list of onion because it is no longer available,” said Binay Shrestha, information officer of Kalimati Fruit and Vegetable Market, one of major and biggest vegetable and fruit markets in Kathmandu that provides fresh vegetables and fruits to the people of Kathmandu Valley.

There is a sharp rise in onion prices in Nepal following the imposition of the export duty by the Union government. The price of onion in the Nepali market has reached around Rs 90 – 100 per kg from Rs 50.

As Nepal imports almost all its onion requirements from India, the hefty export duty has created shortages in the domestic market.

Traders say that the scarcity coincides with Nepal’s festive season when onion consumption explodes. The imposition of 40 percent export duty till December 21, comes at a time when most Nepali festivals fall in between.

Usually, the Kalimati Fruit and Vegetable market in Kathmandu imported 100 tons of onion on average but with the imposition of the export duty, this number has dipped to 40 tons on Sunday and August 21. From Tuesday, the exporters have stopped importing the onion, said Shrestha.

Nepal heavily relies on imported onions from India due to minimal domestic production. The country imported 180,190 tons of onions worth Rs 6.75 billion in the last fiscal year.

The Himalayan country is among the top five export destinations of Indian onions. In the April-June 2023 period, India exported onions to 65 countries, of which a maximum quantity of 1.39 lakh tons was shipped to Bangladesh.

Besides Bangladesh, Malaysia (1.07 lakh metric tons), the UAE (0.90 lakh metric tons), Sri Lanka (0.80 lakh metric tons), and Nepal (0.39 lakh metric tons) are among the top five places that import onion from India.