India to allow limited quantity of onion exports to Bangladesh 

India has decided to allow limited-scale onion exports to Bangladesh through a government-to-government arrangement.

The decision to resume exports of onions to Bangladesh and five other countries comes following recommendations from the Ministry of Foreign Affairs of India, the Economic Times reported on Monday (19 February).

A person familiar with the matter said a limited quantity of onion exports has been allowed for the sake of bilateral relations, though no decision has been made on lifting a complete ban on onion exports.

Details of the exporting agency could not be ascertained, said the report.

The five other countries to which export has been permitted are Nepal, Bhutan, Bahrain and Mauritius.

India, the world's second largest onion exporter, had banned shipments of the kitchen staple in December 2023 until March 2024 due to rising domestic prices and potential shortages. The ban led to a surge in onion prices in neighbouring countries including Bangladesh.

As onion prices started to rise in August 2023, the Indian finance ministry imposed a 40% export duty to curtail shipments. However, it failed to have the desired effect due to under invoicing, prompting the government to impose a minimum export price of $800 per tonne on onions effective from October 28.

Some large exporters wrote to the Indian government on Sunday, suggesting that instead of completely banning onion exports, it should permit outward shipments on a restricted basis, adding that any major export volume can lead to a significant price rise in the domestic market, the daily reported.

Earlier on 9 February, Bangladesh sought India's support in supplying essential commodities, especially onion from India ahead of Ramadan, a fasting month for Muslims, in an effort to keep prices of the essentials stable.

"We discussed the import of perishable items from India. We have discussed in detail so that we get 50 thousand tonnes of onion and 1 lakh tonnes of sugar before Ramadan," Foreign Minister Hasan Mahmud told reporters after his meeting with India's Commerce and Industry Minister Piyush Goyal.

The foreign minister mentioned that the new government of Bangladesh under the leadership of Prime Minister Sheikh Hasina begins a fresh journey with new mandates, and one of the priorities of the government is to address the prices of essential commodities.

Hasan Mahmud requested Piyush Goyal to take necessary measures in ensuring uninterrupted supply of the essential commodities to Bangladesh until Ramadan.  

Piyush Goyal said India is committed to ensuring the economic and financial stability in Bangladesh.

He assured of accommodating the Bangladesh foreign minister's request for supplying essential commodities.

The Indian minister stressed on further improving the trade and commerce relations between the two countries.

Hasan Mahmud also requested Piyush Goyal to remove tariff and non-tariff barriers on export products of Bangladesh