In the wake of India's sweeping export ban on onions, the Nepalese government has announced its intention to formally request the supply of the essential culinary ingredient from its southern neighbour. The ban, which comes as India seeks to stabilize domestic prices ahead of next year's national elections, has left Nepalese consumers struggling to source onions, thereby driving up prices to as much as NPR 200 per kilogram.
India's recent export restrictions, which also extend to wheat, rice, and sugar, are likely to disproportionately impact Nepal, a country that relies heavily on India for its onion supplies. The knock-on effects of any disruption in India's onion market are thus keenly felt in Nepal, leading to significant price hikes in local markets.
While the Indian government has stipulated that onion exports may be permitted on a case-by-case basis, subject to the receiving government's formal request, Nepalese officials have also begun exploring alternative import avenues. However, the perishable nature of onions makes large-scale imports from countries other than India a challenge.
In the interim, the ban has reportedly led to an increase in smuggling activities across the porous border between the two nations. Over the weekend, police in the Kavrepalanchok district intercepted seven vehicles carrying 16 tonnes of onions, believed to have been illicitly imported using outdated invoices. The seized goods have since been forwarded to the Department of Revenue Investigation for further scrutiny.
Despite the ban, the Kalimati Fruits and Vegetables Market, Nepal's largest wholesale marketplace, reported receiving 20 tonnes of onions on Sunday. The source of these onions, however, remains unclear, with speculation that they may either be old stock or smuggled goods.
In the face of these challenges, the Potato-Onion Import-Export and Wholesaler Association has called on the government to intervene and streamline the supply system. The association's president, Mohan Baniya, has warned of a potential crippling shortage if the issue is not promptly addressed.
Meanwhile, the Department of Commerce, Supplies and Consumer Protection has revealed that there have been no concrete efforts to import onions from alternative sources like China or Pakistan, despite requests from traders. While Chinese onions are available, Nepalese consumers generally prefer the taste of Indian onions, and are willing to pay a premium for them.
In the last fiscal year, Nepal imported 180,190 tonnes of onions, valued at NPR 6.75 billion, from India.
Source: Kathmandu Post