In an effort to control rising costs on the domestic market, India on Saturday announced the 40 percent duty on the export of onions till December 31.
The declaration was made in a notification of Indian finance ministry.
One nation that imports onions from India to satisfy domestic demand is Bangladesh. Bangladeshi importers will now import less onions compared to earlier. So a pressure will automatically be imposed on Bangladeshi onion stock and the price will skyrocket, said an onion importer, wishing not to be named.
According to officials at the Ministry of Consumer Affairs and Commerce, rumors that onion prices in India are anticipated to increase in September coincide with the imposition of the export duty.
Quoting traders, Indian media reports recently suggested that prices of quality onions used by household consumers are set to nearly double to 55-60 rupees a kg by September.
The Indian government`s use of trade-related policies to fight inflation served as the context for the action.
The government has already reduced the import tax on edible oils and restricted the export of wheat and rice.
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