India has allowed exports of onions through government-to-government route to Bangladesh and five other countries on the recommendation of its external affairs ministry.
A limited quantity of onion exports has been allowed for bilateral purposes, although a final decision regarding the complete lifting of the ban on onion exports remains pending, The Economics Times reported citing a knowledgeable source.
The other countries benefiting from this arrangement are Sri Lanka, Mauritius, Bahrain, Bhutan, and Nepal.
According to the report, details about the exporting agency could not be confirmed.
The Bangladesh government has formally appealed to India to permit specific quantities of sugar and onions to alleviate prices in the domestic market during the holy month of Ramadan.
India, the world's second-largest exporter of onions, had imposed a ban on shipments of this kitchen staple from December 2023 to March 2024 due to escalating domestic prices and potential shortages. Consequently, onion prices surged in neighboring countries, including Bangladesh.
In response to rising onion prices in August 2023, the finance ministry imposed a 40% export duty to curb shipments. However, this measure proved ineffective due to under-invoicing, prompting the government to establish a minimum export price of $800 per tonne on onions, effective October 28.
Bangladesh heavily relies on onion imports, and its prices are closely linked to the Indian market. Annually, Bangladesh imports 8-10 lakh tonnes of onions, and supply shortages often result in exorbitant prices for the product.