New Delhi, December 23, 2025
In a stark reminder of how political upheavals and protectionist turns can ripple through regional trade, India's lucrative onion export market is grappling with the fallout from Bangladesh's ongoing crisis and shifting policies across South Asia. Once a powerhouse supplying nearly half of Dhaka's onion needs, Indian exporters are now watching their market share evaporate, with losses mounting to over Rs 1,100 crore this year alone. As Bangladesh prioritizes self-sufficiency amid economic turmoil, neighbors like Pakistan and Sri Lanka are stepping in, armed with smuggled Indian seeds and aggressive production targets.
The crisis in Bangladesh, exacerbated by the 2024 political upheaval that ousted Sheikh Hasina's government, has accelerated a pivot away from Indian imports. During India's six-month export ban from December 2023 to May 2024—imposed to tame soaring domestic prices ahead of elections—Bangladesh's onion prices doubled, hitting consumers hard. Desperate to shield local farmers and stabilize supply, Dhaka halted imports from India entirely for months, turning instead to rivals like Pakistan and China. By April-September 2025-26, Indian onion shipments to Bangladesh plummeted to a mere 12,900 tonnes—down from 7.24 lakh tonnes the previous year, when the country absorbed 42% of India's total exports. Exporters estimate a staggering Rs 1,100 crore revenue hit, with 30,000 tonnes of onions rotting at the Benapole border in late 2025 due to sudden curbs.
"Bangladesh's self-reliance drive is bringing tears to our eyes," said Vikas Singh, Vice President of the Onion Exporters Association. "They've introduced a lottery system for import permits—only 50 slots a day, capped at 30 tonnes each—until mid-December, when it bumped up to 200. But with their new 'Murikata' variety hitting markets in January, we're staring at even tighter windows." This local strain, developed from Indian seeds smuggled across the border, underscores a broader betrayal: India's failure to enforce seed export bans has armed competitors. Pakistan, for instance, now targets 2.78 million tonnes of production in 2025-26, funneling surplus to Bangladesh at undercut prices. "We made hay while the sun shone—or rather, while India's ban lasted," quipped a Nashik-based exporter anonymously, highlighting how Islamabad capitalized on New Delhi's domestic focus.
The contagion extends beyond Bangladesh. Saudi Arabia, another key buyer, slashed Indian imports to 223 tonnes in 2025-26 from 57,000 tonnes in 2020-21, opting for cheaper Yemeni and Iranian onions. Sri Lanka and Nepal, too, are ramping up local output using pilfered Indian varieties, eroding India's regional dominance. Pritam Sarkar, a seasoned exporter from Maharashtra, laments the profit squeeze: "We used to fetch Rs 80-85 per kg; now it's Rs 45-47 amid frequent border closures under Dhaka's new regime." These policy flips—Bangladesh's permit lotteries, Pakistan's production surge, and India's lingering 20% export duty (lifted only in April 2025)—have left Indian farmers and traders in a bind, with domestic prices dipping despite global demand.
India's response has been piecemeal. The government withdrew the export duty on April 1, 2025, and scrapped the minimum export price to revive shipments. Yet, the Horticulture Produce Exporters Association (HPEA) is pushing harder: a letter in October urged a continued seed export ban, while the Onion Exporters Association demanded hiking the RoDTEP incentive from 1.9% to 4%—on par with other vegetables—to level the playing field. APEDA has forwarded the plea to the finance ministry, but exporters fear bureaucratic delays will let Pakistan "capitalize on international markets."
As Bangladesh restarts limited imports from December 7 to curb its own price spikes—importing 700,000 to 1.1 million tonnes annually—the window for India to reclaim lost ground narrows. With Dhaka set to reassess permits on January 16, 2026, analysts warn of a "new normal" in South Asian trade: one where self-reliance trumps old alliances, and India's onion throne wobbles. For now, the heat is on—not just from the subcontinent's sun, but from neighbors rewriting the rules of the kitchen staple game.
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