Nepal faces onion shortage after India imposes 40% export duty

Nepal is facing onion shortage after India imposed the 40 per cent export duty on the commodity. Since Tuesday, 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 more 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.

And 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. Imposition of 40 per cent export duty till December 21, comes at at time when the majority of 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 Monday. 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 which import onion from India.