Indian exporters proceed cautiously as cross-border onion trade with Bangladesh resumes following recent disruptions
After a temporary halt in cross-border trade due to protests in Bangladesh, the flow of onions from India to Bangladesh has resumed. Over 4,500 tons of onions, primarily sourced from the Indian states of Maharashtra and Madhya Pradesh, have begun crossing into Bangladesh through the Petrapole land port near the West Bengal border. This resumption marks a critical step in stabilizing the trade relationship between the two countries, which had been disrupted by recent civil unrest in Bangladesh.
Despite the resumption of trade, Indian exporters remain cautious. Many are holding off on sending new consignments to Bangladesh, preferring to monitor the situation closely to ensure that the disruptions do not reoccur. The cautious approach reflects the uncertainty that still lingers around the stability of the cross-border trade environment.
Bangladesh continues to be a significant market for Indian onions, accounting for approximately 45% of India’s total onion exports in the fiscal year 2024, which amounted to 1.6 million tons. This strong trade relationship has been further influenced by the Indian government’s recent decisions to lift an export ban and impose a minimum export price (MEP) of $550 per ton, alongside a 40% export duty on onions. These measures, while aimed at protecting domestic supply and price stability, have also impacted the dynamics of onion trade with key partners like Bangladesh.
In addition to onions, India’s export portfolio to Bangladesh is diverse, including products such as chillies, grapes, oranges, wheat, cotton, and pulses. This diverse trade relationship underscores the importance of maintaining stable trade routes and addressing any disruptions swiftly.
On the domestic front, the Indian government has taken proactive steps to ensure market stability by procuring nearly 0.46 million tons of onions at market prices to build a buffer stock, with a target of 0.5 million tons. The procurement price for the current fiscal year has seen a significant increase, set at Rs. 2,833 per 100 kg, up by 64% from Rs. 1,724 per 100 kg in the previous fiscal year. This increase in procurement price highlights the government’s commitment to supporting farmers and stabilizing the onion market amid fluctuating supply and demand dynamics.
As onion exports to Bangladesh resume, Indian exporters are navigating the complexities of the current trade environment with cautious optimism, hoping for continued stability and growth in one of their most important export markets.
