In a bid to boost onion exports and ensure remunerative prices to farmers, the Union Cabinet on Tuesday night decided to remove quantitative restrictions on its export.
It also approved retention for the time being the mechanism of canalisation of export through the National Agricultural Cooperative Marketing Federation (NAFED) and other agencies, an official spokesman told reporters after the Cabinet meeting.
Lifting of QRs assumes significance; the farmers of Maharashtra had expressed disappointment over the retention of annual onion export ceiling at 700,000 tonne despite removal of restrictions on export of other farm products.
India is the largest producer and a major exporter of onion. The main markets for Indian onions are Malaysia, Sri Lanka, the United Arab Emirates, Bangladesh and Singapore.
The export of onion has been about 200,000-400,000 tonne, the spokesman said.
The number of agencies and the fees for the service provided to onion export by them would be determined from time to time by the department of commerce, he said.
The Cabinet also approved the retention of inter-ministerial committee to review periodically the overall situation pertaining to onions, he said, adding that the committee comprises representatives of the departments of agriculture, consumer affairs and commerce, besides NAFED.
The department of consumer affairs had indicated that the farming community was under the impression that export restriction was the main cause for low prices of onion.
This impression, he said, was erroneous since exports of onions were currently well below the 700,000 tonne permitted.
The government had raised the export ceiling from 500,000 tonne per year to 700,000 tonne in February 2002.
During 2001-02, India produced an estimated 5.484 million tonne of onion.
Production has been showing an increasing trend except in 1997-98 and 2000-01 when it declined over the preceding year. Export of onion had been suspended from October 12, 1998 due to steep rise in domestic prices.