India's onion export ban sends shockwaves across Asia. Here's why

The recent ban on onion exports by India, the world's largest onion exporter, has created a ripple effect across Asia, causing a surge in prices and forcing countries to seek alternative sources.

Implemented on December 8 due to a significant domestic price hike, the ban has impacted traditional buyers such as Bangladesh, Malaysia, Nepal, and the United Arab Emirates. As India grapples with soaring onion prices, Asian consumers are facing the challenge of higher costs and limited alternatives.

For Asian consumers, especially in countries like Bangladesh, where onions are a culinary staple, the sudden spike in prices is proving difficult to cope with.

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Reuters cited Mousumi Akhtar, a Dhaka resident who expressed the impact, stating, "Onions are needed for almost everything we cook. This sudden price hike is tough to swallow. I've had to cut back on how much I buy."

The dependence on Indian onions for various regional dishes, from Malaysian belacan shrimp paste to Nepali chicken chillies, has led to a serious setback as India's ban disrupts the supply chain.

Traders estimate that India contributes over half of all onion imports by Asian countries, emphasising its pivotal role in meeting the demand for this essential ingredient. The ban, has prompted importing nations like Bangladesh to explore alternative sources such as China, Egypt, and Turkey to overcome shortages. Bangladesh, anticipating general elections, has even initiated the sale of subsidised onions to mitigate the impact of the 50 per cent surge in prices caused by India's ban.

Nepal, heavily reliant on onion imports, faces a particularly challenging situation. Tirtharaj Chiluwal from Nepal's commerce ministry highlighted the scarcity. "Since the ban by India, we have monitored the supply situation at different places. There are no onions on sale," Reuters quoted him as saying.

Nepal is considering imports from China and may seek an exception from India to resume exports, according to ministry spokesperson Gajendra Kumar Thakur.

The ban has prompted importing nations to turn to more expensive alternatives from China, Iran, Pakistan, and Turkey, leading to a hike in prices.

Ajit Shah, an Indian exporter, emphasised the significance of India's role in maintaining its global market position. He suggested that India, with an abundant domestic supply, should reconsider the ban to stabilise prices.

However, the likelihood of lifting the ban before next year's general elections appears slim, given the Indian government's priority to curb food prices.

(With inputs from Reuters)

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