Onion exporters wait for exports incentives even as govt extends it to dehydrated onions

Even as trade and farmer representatives have been trying to incentives for export of fresh onions, the Director General of Foreign Trade (DGFT) increased the Merchandise Export from India Scheme (MEIS) benefits for dehydrated onions from 3% to 5%, taking all stake holders by surprise.

Speaking to ET, Pasha Patel, chairman of Maharashtra State Commission of Agricultural Costs and Prices said, "We have been demanding MEIS benefits at 7% for fresh onion from past several weeks. I had also apprised Union Finance Minister as well as the concerned authorities about it. However, there seems to have been some confusion while issuing the May 24 notification pertaining to de-hydrated onions, which account for a small percentage of the fresh onion."

From the seven months between August 2017 to February 2018, onions had given good returns to farmers as average prices rules between Rs 20/kg to Rs 30/kg, hitting a high of Rs 36/kg. However, prices are now ruling below Rs 10/kg since March as rabi crop was being harvested. Onion prices normally remain subdued between March to May every year.


With forecast of a normal monsoon, which is expected to arrive on time, farmers are likely to increase area under kharif onion, which had given good returns in the previous year. With large storage of rabi crop, any increase in kharif production of onions can lead to a glut in the market.

With 2019 being an election year, Patel said that no government would like to see 'red mud' of onions. "MEIS for fresh onion is necessary as area under the crop is mostly likely to go up leading to excess supplies in the market post August," he said.

Onion exporters too have been demanding export incentives. Ajit Shah, president, Onion Exporters Association said, "The government has stopped MEIS benefits for fresh onion from October 1. We have requested the government to re-instate it."