1: Introduction -

- The Indian government has introduced regulations that allow limited exportation of onions to the United Arab Emirates (UAE) in an attempt to alleviate a domestic surplus.

- The decision has sparked controversy due to allegations of unfair practices and a significant disparity between the selling price in UAE markets and the global prices.

2: What Sparked the Ongoing Controversy?

- In December 2023, the government prohibited onion exports to avert potential domestic shortages while allowing exports to specific nations, including the UAE, in response to diplomatic demands.

- Indian farmers have raised concerns about the significant discrepancy between the price they receive for exports and the inflated prices in UAE markets. For instance, onion prices in UAE markets recently escalated to $1500 per tonne, while India's recent shipments were recorded at about $500 to $550 per tonne.

3: Issues Raised by Exporters and Farmers

- Exporters have criticised the lack of transparency in the export processes, which includes setting export prices and the selection of importers and exporters. They also claim that some UAE importers profiteered unfairly at the expense of Indian farmers.

- Farmers have voiced concerns about the absence of Minimum Support Price(MSP) benefits, the significant price differences with international markets, frequently imposed export bans, and unseasonal heavy rains damaging their harvests.

4: Solution Proposals

- Fair Pricing mechanism: Unequivocal calls have been made for the implementation of a fair and more transparent pricing system.

- Market reforms: Enhancement of the agricultural marketing system to reduce middleman interference and ensure adequate prices for farmers is necessary.

- Export policy audits: A review of India's export policy alignment with the General Agreement on Tariffs and Trade regulations is essential.

- Innovative solutions: Suggestions have been made to introduce mobile, solar-powered dehydration units at village levels, which could help farmers deal with surplus production and help prevent spoilage.

5: Related International Policies

- The WTO Agreement on Agriculture, Sanitary and Phytosanitary Measures and the International Plant Protection Convention are treaties associated with the import and export of agro-products. India is a signatory to all these agreements and thus needs to comply with their terms.

6: Onion Trivia

- India is the world's second-largest onion producer, cultivated prominently in Maharashtra, Karnataka, Orissa, Uttar Pradesh, Gujarat, Andhra Pradesh and Tamil Nadu.

- The major states of onion export from India are Bangladesh, Malaysia, United Arab Emirates, Sri Lanka and Nepal.

- Onion, a member of the lily family, is a crucial horticultural product that has wide-ranging culinary and medicinal applications.