Govt removes minimum export price cap on onion, basmati rice ahead of assembly polls in Maharashtra, Haryana

The government has scrapped a minimum price threshold that it had set previously for exports of onion as it looked to pass on the benefit of international glut to Indian farmers. 

The government had previously fixed a $550 per tonne as the minimum export price (MEP), which essentially meant farmers could not sell their produce overseas at lower than this rate. 

A DGFT notification issued on September 13 removed the MEP with immediate effect. The move comes ahead of assembly elections in Maharashtra, a key onion producing state. The move would help promote exports of the commodity. 

“The Minimum Export Price (MEP) condition on Export of onions is removed with immediate effect and until further orders,” the directorate general of foreign trade (DGFT) said in a notification. 

Additionally, the government also announced the removal of MEP on the exports of basmati rice. 

In a post on X (formally Twitter), Commerce Minister Piyush Goyal hailed the latest decision and said the export of high-quality rice would boost farmers' earnings. "This will increase the export and also increase the income of farmers," he wrote.

The move is aimed to boost ruling party's chances ahead of the upcoming assembly polls in Haryana.

Last year, the government had set the minimum export price (MEP) of $1,200 per tonne on exports of basmati rice, which was later reduced to $950 per tonne. India, the world’s biggest rice exporter, also curbed exports of non-basmati varieties in an attempt to keep a lid on domestic prices. 

India exports 4-5 million metric tonnes of basmati - the premium long-grain variety famed for its aroma - to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates and the United States.