Pakistan braces for impact as India implements 40% export duty on onions to stabilize prices

Porters rest on onion and potato bags at a vegetable market on the outskirts of Islamabad on August 19, 2020. (AFP/File)
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Updated 19 August 2023
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Pakistan braces for impact as India implements 40% export duty on onions to stabilize prices

  • Indian duty may prompt China and Pakistan to raise prices since they have a limited surplus for exports
  • New Delhi took the decision as India’s annual retail inflation in July rose to its highest in 15 months

MUMBAI: India will impose with immediate effect a 40% export duty on onions up to Dec. 31 in an attempt to improve domestic availability of the vegetable, its ministry of finance said in a notification on Saturday.

The duty imposed by the world’s biggest exporter of onions will help New Delhi dampen local prices ahead of key state elections later this year but will force Asian buyers to shell out more, as other regional exporters have limited supplies.

“The export duty will make Indian onions more expensive than those from Pakistan, China, and Egypt. This will naturally lead to lower exports and aid in reducing local prices,” said Ajit Shah, an exporter based in Mumbai.

Average wholesale onion price in key markets has jumped nearly 20% from July to August, to 2,400 rupees ($28.87) per 100 kg on concerns that erratic rainfall would lead to lower yields.

India is heading for its driest August in more than a century, with scant rainfall likely to persist across large areas, partly because of the El Niño weather pattern, two weather department officials told Reuters on Friday.

“Onions harvested during the summer months are rotting quickly, and the new supplies are being delayed. This situation has prompted the government to take precautionary measures,” said another Mumbai-based exporter.

India’s onion exports in the first half of 2023 jumped 63% from a year ago to 1.46 million metric tons.

Countries such as Bangladesh, Nepal, Malaysia, United Arab Emirates and Sri Lanka rely on Indian shipments.

Onions are used as the base for traditional dishes across Asia such as biryani in Pakistan and India, belacan in Malaysia and fish curry in Bangladesh.

“The Indian duty would prompt China and Pakistan to raise prices, as they have a limited surplus for exports,” said the second exporter.

India’s annual retail inflation in July rose to its highest in 15 months as vegetable and cereals prices skyrocketed, putting pressure on the government to take action to bring down prices.

India surprised buyers last month by imposing a ban on widely consumed non-basmati white rice sales to dampen price rises.


Pakistani, Bangladeshi officials discuss trade, investment and aviation as ties thaw

Updated 28 December 2025
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Pakistani, Bangladeshi officials discuss trade, investment and aviation as ties thaw

  • Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war
  • Ties between Pakistan, Bangladesh have warmed up since last year and both nations have resumed sea trade

ISLAMABAD: Pakistan's High Commissioner to Bangladesh Imran Haider on Sunday met Chief Adviser Muhammad Yunus in Dhaka, the latter's office said on, with the two figures discussing trade, investment and aviation.

Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war, which saw the part previously referred to as East Pakistan seceding to form the independent nation of Bangladesh.

Ties between Pakistan and Bangladesh have warmed up since former prime minister Sheikh Hasina’s ouster as a result of a student-led uprising in August 2024. Relations remain frosty between Dhaka and New Delhi over India’s decision to grant asylum to Hasina.

Pakistan has attempted to forge closer ties with Bangladesh in recent months and both South Asian nations last year began sea trade, followed by efforts to expand government-to-government commerce.

"During the meeting, both sides discussed ways to expand cooperation in trade, investment, and aviation as well as scaling up cultural, educational and medical exchanges to further strengthen bilateral relations between the two South Asian nations," Yunus's office said in a statement on X.

In 2023-24 Pakistan exported goods worth $661 million to Bangladesh, while its imports were only $57 million, according to the Trade Development Authority of Pakistan. In Aug. this year, the Pakistani and Bangladeshi commerce ministries signed a memorandum of understanding to establish a Joint Working Group on Trade, aiming to raise their bilateral trade volume to $1 billion in the financial year that began in July.

The Pakistani high commissioner noted that bilateral trade has recorded a 20 percent growth compared to last year, with business communities from both countries actively exploring new investment opportunities, according to the statement.

He highlighted a significant increase in cultural exchanges, adding that Bangladeshi students have shown strong interest in higher education opportunities in Pakistan, particularly in medical sciences, nanotechnology, and artificial intelligence. Haider also said that Dhaka-Karachi direct flights are expected to start in January.

"Chief Adviser Professor Muhammad Yunus welcomed the growing interactions between the two countries and emphasized the importance of increased visits as well as cultural, educational and people-to-people exchanges among SAARC (South Asian Association for Regional Cooperation) member states," the statement read.

"Professor Yunus also underscored the need to further boost Bangladesh–Pakistan trade and expressed hope that during Mr. Haider’s tenure, both countries would explore new avenues for investment and joint venture businesses."