Driven to tears – India imposes export levy on onions to curb rising food prices | 25 August 2023 | UPSC Daily Editorial Analysis

Please Share with maximum friends to support the Initiative.

What's the article about?

  • It analyses the pros and cons of the steps taken by the Union Government to curb the rising prices of the onions.


  • GS3: Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices; Issues of Buffer Stocks and Food Security;
  • Prelims


  • The retail inflation in India, measured by the Consumer Price Index (CPI), has been increasing due to high food inflation, particularly in the prices of tomatoes and onions.
  • To address the rise in onion prices, the Union Government has imposed a 40% export levy on onion exports until December 31, 2023.
  • This move is aimed at controlling the domestic price of onions by making Indian onions more expensive than those from other countries like Pakistan, China, and Egypt.
  • The export duty is expected to lower the exports of onions and improve the supplies in the domestic market.


  • Reasons for rising onion prices:
    • Maharashtra and Madhya Pradesh account for almost 60% of India's onion supplies, and deficient rainfall in these states has put a question mark on the moisture-sensitive tuber's prospects this kharif season.
    • These worries likely triggered the recent uptick in onion prices from around ₹23 a kilo two months ago to over ₹31 by August 2023.
  • Impact of export levy:
    • Onion traders and farmers were not impressed with the export levy, and markets were shut in protest in Nashik, Asia's largest onion trading hub, as farmers feared a glut and a price crash.
    • To quell onion farmers' displeasure, the government promised to purchase onions at a “historical high” price of ₹2,410 per quintal, and buffer stock procurements will be ramped up further if needed.
    • However, a Bank of Baroda report cautioned that steps such as export curbs also have a tendency to reinforce the scarcity factor worrying markets and push up prices further.
  • Other measures:
    • This move follows curbs on non-basmati rice shipments outside India in July, and stock limits on pulses and wheat imposed in June.
    • The government also announced a hike in buffer stocks of onions by two lakh metric tonnes.

Operation Greens:

  • Operation Greens is a project approved by the Ministry of Food Processing Industries in India with the aim to stabilize the supply of tomato, onion, and potato crops (TOP crops) in the country and ensure their availability year-round without price volatility
  • The project was first introduced in the 2018-2019 Union budget of India and has been allocated Rs 500 crores to promote farmer producers' organizations (FPOs), agri-logistics, processing facilities, and professional management.
  • The objectives of Operation Greens are to increase and stabilize the production of TOP crops and to double the income of farmers by the end of 2022.
  • The operation aims to replicate the success of the increase in production of milk in India through the implementation of Operation Flood.
  • The scheme has been extended to all fruits and vegetables.
  • The program focuses on organized marketing of TOP vegetables by connecting the farmers with consumers and thereby ensuring that farmers are given the right price for the resource created by them.
  • The operation aims to promote farmer producers organizations, agri-logistics, processing facilities, and professional management of agricultural produce.

Way Forward:

  • Building durable food supply chains, especially for vegetables that are traditionally susceptible to price volatility, needs greater attention so that monetary policy can focus on growth concerns.

Please Share with maximum friends to support the Initiative.

Download the Samajho App

Join 5 lakh+ students in downloading PDF Notes for 2000+ Topics relevant for UPSC Civil Services Exam. &nbsp Samajho Android App: Samajho iOS App: &nbsp Samajho IAS Youtube Channel (300K+ Subscribers):