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Exploring the Growing Trend of Onion Export from India

Welcome to our blog, where we dive deep into the world of agriculture and uncover fascinating trends that shape global markets. Today, we embark on an exciting journey to unravel the remarkable rise of onion export from India. Over the past few years, this humble vegetable has captured international attention with its unique flavor profile and immense versatility in a plethora of cuisines worldwide.

Join us as we peel back the layers and explore how India’s onion export industry is sprouting vigorously, revolutionizing both local economies and dinner tables around the globe. Prepare yourself for a tantalizing exploration that will leave you craving more knowledge about this intriguing trend!

Introduction to Onion Export from India

India is the second-largest producer of onions in the world, with only China producing more. In recent years, there has been a growing trend of onion exports from India. This is due to several factors, including the increasing demand for Indian onions globally and the government’s policies encouraging onion exports.

Onions are an important part of Indian cuisine and are used in many dishes. They are also used as a traditional offering in religious ceremonies. The average Indian consumes around 15 kgs of onions per year. Onions are grown in almost all parts of India, with the major production states being Maharashtra, Karnataka, Andhra Pradesh, and Madhya Pradesh.

Indian onions are in high demand globally due to their superior quality. They are known for their pungent taste and strong aroma. Indian onions are available in a variety of sizes and colors, including white, red, and pink. The most common type of onion exported from India is the red onion.

The export of onions from India has been increasing steadily over the past few years. In the financial year 2018-19, the value of onion exports was Rs 4200 crores (US$610 million), an increase of 26% over the previous year. The top destination for Indian onion exports is Bangladesh, followed by UAE, Nepal, Malaysia, and Sri Lanka.

There are several reasons behind the growing trend of onion exports from India. One reason is the increasing demand for Indian onions globally. India has been able to capture the export market due to its superior quality onions, competitive prices, and excellent packaging. In addition, the government has also implemented various policies and initiatives to encourage onion exports. These include providing financial assistance to farmers for improving production and allowing duty-free import of agricultural products.

Onion exports from India are likely to continue growing in the coming years as global demand increases and the government continues to support farmers. This will ensure a steady supply of high-quality onions for both domestic consumption and export.

The Reasons for the Explosion of Onion Exports from India

The primary reason for the explosion of onion exports from India is the high demand for the commodity in the global market. India is one of the largest producers of onions in the world, and as such, can meet the high demand for onions in the international market. Additionally, Indian onions are typically lower in price than onions from other countries, making them an attractive option for buyers.

Another reason for the growth of onion exports from India is the implementation of effective farming and trading practices by Indian farmers and traders. In recent years, there has been a shift towards more efficient methods of cultivation and storage, which has helped to improve both yield and quality. This, in turn, has made Indian onions even more competitive in the global market.

The Indian government has taken steps to promote onion exports from the country. In particular, it has allotted financial assistance to farmers and traders engaged in onion cultivation and trade. These measures have gone a long way in boosting onion exports from India.

Benefits of Exporting Onions from India

The export of onions from India has been on the rise in recent years. This is due to the growing demand for Indian onions in international markets. The main benefits of exporting onions from India are as follows:

Onion export

1. Onion exports provide a valuable source of foreign exchange for the country.

2. Export of onions helps in boosting the domestic onion industry by providing an additional outlet for their produce.

3. Onion exports also help in generating employment opportunities in the country.

4. Export of onions helps in spreading Indian culture and cuisine to other parts of the world.

5. Onion exports contribute to the overall economy of the country by generating revenue for the government.

The Mechanism of Producing, Process, and Export of Onions in India

India is the world’s second largest producer of onions with an annual production of around 20 million tonnes. The country exports around 1.5 million tonnes of onions every year and is the leading exporter of onions in the world.

Onions are grown in almost all the states of India but the major producing states are Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Andhra Pradesh, and Rajasthan. These six states together account for more than 80% of the total onion production in the country.

The main markets for Indian onion are Bangladesh, UAE, Sri Lanka, Nepal, Malaysia, and Saudi Arabia. Onion export from India has been growing at a steady pace over the past few years and reached Rs 4500 crore in 2018-19. The government has also set a target to double onion exports to 3 million tonnes by 2021-22.

There are several reasons behind the growing trend of onion export from India. Firstly, Indian onions are cheaper as compared to onions produced in other countries due to the lower cost of production. Secondly, Indian onions have a longer shelf life which makes them ideal for export purposes.

Thirdly, India has a large customer base due to its geographical proximity to major onion-importing countries. Fourthly, the quality of Indian onions is very good which has helped build a strong reputation for Indian onions in international markets. Government support through various initiatives like providing subsidies on transportation and storage has also played a key role in promoting onion exports from India.

The process of producing onions in India usually follows a particular pattern. To start with, the farmers prepare their fields by plowing the soil and adding fertilizers. Then they sow the onion seeds into the prepared land either using broadcasting or line sowing according to the variety they are sowing.

The sprinkler irrigation method is preferred for onions as it allows for better extraction of nutrients from the soil. After a month or two, onion seedlings are ready for transplanting into the main field. The weeds are managed with pre-emergence herbicides to avoid their competition with onions for growth and nutrition. Then the onions are harvested manually when they reach full maturity and then separated according to different grades.

After harvesting, onion bulbs need to be cured to improve shelf life and reduce moisture content before packing for export purposes. For curing, onions are spread on mesh cloths in open air allowing sunlight exposure which helps in removing excess water from them through evaporation. Onions are kept spread out on the mesh for a few days until their desired humidity level is achieved before packing them into jute bags. These jute bags filled with cured onions are then loaded onto trucks and shipped to ports for export.

At the ports, onions are unloaded and put through a series of laboratory tests to check for harmful or foreign matter. After necessary tests, the onions are packed into shipping containers along with other necessary paperwork for export purposes before being shipped to their destination countries. Thus, the journey of Indian onions starts from the farmers’ field and ends at the buyer’s store in some distant land.

Challenges Faced by Indian Farmers in the Export of Onions

India is the second-largest producer of onions in the world, accounting for about 15% of global production. However, the country’s share in the international onion trade is very low, at around 2%. This is due to various challenges faced by Indian farmers in exporting onions.

One of the major challenges is the lack of storage facilities for onions. Most Indian farmers do not have access to proper storage facilities, which results in onions getting spoiled quickly. This not only leads to the loss of crops for farmers but also reduces the shelf life of onions, making them unsuitable for export.

Another challenge facing Indian onion farmers is the high cost of transportation. Due to the lack of good infrastructure, transport costs are very high, which makes exporting onions unviable for many farmers.

Indian onion farmers have to contend with volatile prices. Prices of onions can fluctuate wildly due to factors such as weather conditions and crop yields. This makes it very difficult for farmers to plan their production and exports and often leads to them incurring losses.

Key Strategies Adopted by Indian Farmers and Industry Players for Onion Export

There has been a growing trend of onion export from India in recent years. This is due to the increasing demand for onions in the international market, as well as the fact that India is one of the largest producers of onions in the world. To take advantage of this trend, farmers and industry players have adopted various key strategies.

One of the main strategies adopted by farmers has been to increase onion production. This has been done by using high-yielding varieties of onions, as well as adopting better irrigation and fertilization practices. Additionally, farmers have also started storing onions for longer periods, which has helped them meet the rising demand during peak export season.

Industry players have also taken steps to facilitate onion export from India. They have set up packaging facilities that meet international standards, and established relationships with overseas buyers. Additionally, they have also provided financial assistance to farmers to help them expand their onion cultivation activities.

Alternatives to the Onion Export in India

India is the second largest producer of onions in the world, behind only China. Onion export from India has been growing rapidly in recent years, as the country looks to take advantage of its production capabilities. However, not all onions grown in India are suitable for export. Alternatives to the onion export include:

1) Selling onions to domestic markets: This is the most common alternative to exporting onions. Indian farmers typically sell their onions to local wholesalers or retailers, who then sell them to consumers. This is the most profitable option for small-scale farmers, as they do not have to incur the costs associated with exporting their onions (e.g., transportation, packaging, etc.).

2) Selling onions to processing companies: Another alternative to exporting onions is selling them to companies that process them into other products (e.g., powder, flakes, etc.). This option is more viable for large-scale onion growers, as they can negotiate better prices with processing companies.

3) Donating onions to charities: Some farmers donate their excess onion crops to charities that distribute food to needy people. This option helps reduce onion wastage and also provides a social benefit.

Conclusion

In this journey of exploring and understanding the onion export phenomenon, the role of export-import business consultants becomes paramount. Among these, Exim Intell stands out as a trusted partner and expert guide for businesses venturing into the international trade arena. With their extensive industry knowledge, personalized solutions, and commitment to facilitating seamless cross-border transactions, Exim Intell proves to be an invaluable asset to exporters and importers alike.

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SAFTA Agreement: A Win-Win for SAARC Nations?

The South Asian Free Trade Area (SAFTA) was meant to turn South Asia into a trading bloc. Twenty years on, the region still buys more from China and the Gulf than from its neighbours. So is the SAFTA agreement a win-win? For some exporters, yes. For the region, the scorecard is patchier than summit speeches suggested.

SAFTA Full Form and What It Covers

Most people searching for the SAFTA full form want one clear line, so here it is: South Asian Free Trade Area (SAFTA), a free trade pact between the eight SAARC members.

Those members are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The pact was signed on 6 January 2004 in Islamabad and came into force on 1 January 2006. You can read the full legal text, including the annexes on rules of origin, on the World Bank WITS portal.

The idea is simple on paper. Members cut import duties on each other’s goods in phases, down to a 0 to 5 percent band, except for products each country parks on a “sensitive list”. Everything else is supposed to flow across borders at near-zero duty.

A Short History: From SAPTA to SAFTA

SAFTA didn’t appear out of nowhere. Its parent was SAPTA, the SAARC Preferential Trading Arrangement agreed in 1993. Tariff cuts under the new pact started on 1 July 2006, and Afghanistan joined later, in 2011. The South Asian Free Trade Area SAFTA cuts duties among SAARC countries. 

SAPTA worked product by product. Countries sat across the table, swapped lists, and agreed concessions one item at a time over four rounds. It was slow, and the concessions often covered goods nobody was trading much anyway. SAFTA flipped the logic: cut duties on almost everything, then carve out exceptions.

How the SAFTA Tariff Schedule Works

The agreement splits members into two groups. India, Pakistan and Sri Lanka are the non-LDCs and move faster. The least developed members get more time and softer rules.

Item

Non-LDC members

LDC members

First two years (2006 to 2008)

Cut tariffs to 20%

Cut tariffs to 30%

Second stage

0 to 5% within 5 years (Sri Lanka 6)

0 to 5% within 8 years

Duty on imports from LDCs

0 to 5% within 3 years

Not applicable

Rules of origin

Tariff heading change + 40% local value

Tariff heading change + 30% local value

Sensitive list review

Every four years

Every four years

Here’s the part most summaries skip. None of these cuts apply to items on a country’s sensitive list, and those lists are long. Before you quote a SAARC buyer, check who is already shipping your HS code across the border using EximIntell’s import export data.

India went further than it had to on one front. It cut duties to zero for SAARC LDCs from 1 January 2008, a full year early. For an Indian buyer sourcing jute bags from Bangladesh or large cardamom from Nepal, that concession matters more than any joint statement.

Rules of Origin: The Fine Print That Decides Your Duty

A lower tariff means nothing if your goods don’t qualify as “originating”. SAFTA uses two tests together. The product must change its tariff heading at the four-digit HS level, and it must carry a minimum share of local value.

That share is 40% for non-LDC exporters. LDCs get a lighter bar at 30%, and there are product-specific rules for a few hundred tariff lines where the general test doesn’t fit.

In practice, this is where many small exporters trip. A trader who imports Chinese components, repacks them in Surat and ships to Dhaka won’t clear the value test. The buyer then pays full MFN duty, and the deal quietly falls apart.

The fix is to keep a clean cost sheet for every SKU, showing where each input came from and what it cost. Customs officers in Dhaka or Colombo can ask for it months after the goods have cleared.

Benefits of SAFTA for SAARC Nations

Where SAFTA works, it works quietly. Most gains show up in duty savings and easier sourcing rather than headline numbers.

  • Duty-free entry for LDC exporters: Bangladesh, Nepal and Bhutan get near-zero duty access to India on most goods, which is a real edge for small manufacturers.
  • Cheaper regional inputs: A factory in Gujarat importing Sri Lankan rubber or Bangladeshi yarn pays less duty, provided the product clears rules of origin.
  • Shorter supply routes: Landlocked Nepal and Bhutan depend on Indian ports and roads, so lower tariffs stack on top of an existing logistics advantage.
  • Softer origin rules for LDCs: Needing only 30% local value addition, not 40%, lets thinner industrial bases still qualify for concessions.
  • A standing forum: The SAFTA Ministerial Council and its expert committee give members a fixed place to review lists and raise trade complaints.

Why SAFTA Hasn’t Delivered What It Promised

Intra-regional trade in South Asia still sits at roughly 5 percent of the region’s total trade. Compare that with ASEAN, where the figure is closer to a quarter.

That gap isn’t an accident. Five problems keep coming up.

  • Long sensitive lists: A World Bank analysis found these lists exempt anywhere from about 6 to 45 percent of a country’s imports from its neighbours.
  • Non-tariff barriers: Lab testing, duplicate paperwork and slow land ports like Petrapole and Benapole eat up the duty savings.
  • India and Pakistan politics: Pakistan never gave India full access, relying on a positive list, and bilateral trade has been mostly suspended since 2019.
  • LDC compensation that never happened: Article 11 promised to make up lost customs revenue for poorer members. It was not implemented.
  • Thin services coverage: A services agreement was signed in 2010, but goods still make up almost everything SAFTA touches.

Then there’s the bigger politics. SAARC hasn’t held a leaders’ summit since Kathmandu in 2014, so nobody at the top is pushing for deeper cuts.

Who Actually Gains From the SAFTA Agreement?

India and Sri Lanka gain the most in absolute export value. The LDCs gain the most relative to their size, mainly through duty-free access to the Indian market.Exporters need a certificate of origin for South Asian Free Trade Area SAFTA benefits. 

Look at it country by country and the picture gets sharper. India is the largest economy in the bloc and ships the widest range of goods: engineering items, chemicals, pharma, cotton yarn, vehicles and processed food. For Indian exporters, SAFTA mostly helps in markets like Bangladesh and the Maldives, where no deeper bilateral deal exists.

Bangladesh sits on the other side of the same trade. Its garment and jute makers use duty-free entry into India, and Indian buyers have steadily grown their sourcing from across the border.

Nepal and Bhutan are a special case. Their trade runs almost entirely through India, and older bilateral treaties already cover much of it. For them, the SAFTA agreement acts more like a backup than the main door.

Pakistan is the outlier. On paper it’s a full member. In reality, trade with India has been close to frozen for years, so the pact adds very little for either side.

But here’s a twist. Many exporters don’t use SAFTA at all. The India-Sri Lanka FTA, the India-Nepal trade treaty and India’s arrangement with Bhutan often offer better terms, so a smart shipper compares rates first. Preference use sits below 10 percent of regional trade by most estimates, and this is a big reason why.

How to Get a SAFTA Certificate of Origin in India

Your buyer can only claim the lower duty under the SAFTA agreement if the shipment carries a SAFTA certificate of origin. No certificate, no concession. It’s that blunt.

In India, the Export Inspection Council and its regional agencies issue it for most goods. MPEDA handles marine products, and the Textiles Committee covers textiles and made-ups.

Applications go through DGFT’s common digital platform for certificates of origin. Paper applications are largely a thing of the past now.

You’ll need a valid IEC and a Class 3 digital signature linked to that IEC. Keep your commercial invoice, packing list and proof of origin ready, such as a cost sheet showing local value addition.

Processing is usually quick when the file is clean. Delays almost always come from a missing cost breakup or an IEC profile that doesn’t match the GST records, so fix those before you hit submit.The RoDTEP Scheme refunds hidden taxes paid on exported goods. 

A tip from experience: make sure the HS code on your invoice, shipping bill and certificate of origin all match. A mismatch at the border is the most common reason a buyer gets denied the preferential rate.

SAFTA vs Bilateral Deals: Which One Should You Use?

Don’t assume the SAFTA agreement is your best route. For Sri Lanka, the bilateral FTA often gives a lower rate and a shorter sensitive list. For Nepal and Bhutan, the bilateral treaties already allow largely duty-free movement of many goods.

So pull up both tariff schedules for your HS code, compare, and pick the cheaper one. Five minutes of checking can change your landed price by several percent.

One more check people forget: whether your product sits on the importing country’s sensitive list under each deal. A 0% rate on paper is useless if your item is excluded. We’ve seen exporters quote a duty-free price to a Colombo buyer, only to find the product was carved out, and the margin vanished.

Also think about what your buyer can actually process. Some smaller importers in the region are used to one certificate format and will ask for it by name. Ask them upfront which agreement they usually clear goods under. It saves a round of emails and, sometimes, a held container.

Conclusion 

The SAFTA agreement is a win for some players and a missed chance for the region. LDC exporters and Indian importers of regional inputs gain real money from it.

Yet with regional trade stuck near 5 percent of the total, SAARC nations are leaving most of the benefit on the table. For exporters, the practical move is to treat SAFTA as one option among several, get the paperwork right, and pick whichever agreement gives your HS code the lowest duty.

FAQs

Q1. What is the SAFTA full form?

It stands for South Asian Free Trade Area (SAFTA). It’s the free trade arrangement of the eight SAARC countries, in force since 1 January 2006.

Q2. Is the SAFTA agreement still in force?

Yes. It remains legally in force, though India and Pakistan trade very little with each other and sensitive lists still exclude a large share of goods.

Q3. Who issues a SAFTA certificate in India?

The Export Inspection Council and its agencies issue it for most goods, MPEDA for marine products and the Textiles Committee for textiles. You apply online through DGFT.

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Discover Top 5 Most Lucrative Exports from India to France

“Bonjour! Have you ever wondered what India Exports to France, one of the largest economies in Europe? From aromatic spices to textile marvels and everything in between, India has always been renowned for its diverse range of export products.

Are you curious about the top 5 most lucrative Exports from India to France, splashing the International Market? Join us as we explore these fascinating trade opportunities and unravel their exciting potential for businesses looking to expand their global reach!”

Introduction to Exporting Goods from India to France

Regarding Exports, India has a lot to offer the world. From spices and textiles to tea and coffee, a variety of products are popular in France. Here is a look at some of the top exports from India to France:

Spices: India is one of the world’s largest spices producers. Common Indian spices like turmeric, cumin, and pepper are used in French cooking to add flavour and depth.

Textiles: India is also one of the world’s leading materials producers. Cotton, silk, and wool are all popular fabric choices from India. French fashion designers often use these fabrics in their garments.

Tea and coffee: Tea and coffee are two other popular exports from India to France. People of all ages in France enjoy these beverages, and are a key part of the country’s culture.

What are the Most Lucrative Exports From India To France?

India is a big market for Exports to France. The most popular items Exports from India to France include:

1. Spices: Indian spices are in great demand in France, especially cardamom, cloves, cumin, and pepper. French chefs use these spices to add flavour and depth to their dishes.

2. Tea: Tea is another popular exports from India to France. Indian tea is known for its rich flavour and health benefits.

3. Coffee: French people love their coffee, and Indian coffee is becoming increasingly popular in the country. Indian coffee beans are known for their unique flavour profile and strong aroma.

4. Rice: Rice is a staple food in many parts of the world, and India is one of the leading producers of this grain. Indian rice is exported to France, where it is used in various dishes, including curries and pilafs.

5. Lentils: Lentils are another popular Exports from India to France. These nutritious legumes are used in soups, stews, salads, and side dishes throughout the country.

Essential Steps for Legal Export from India to France

1. Essential Steps for Legal Exports from India to France:

If you are looking to exports goods from India to France, there are a few essential steps that you must take to ensure a smooth and legal process. Here are the key steps involved in exporting from India to France:

Exports From India to France

1. Obtain an Export Licence: To Export goods from India to France, you must obtain an export licence from the Indian government. This can be done by submitting an application form along with the required documents to the Directorate General of Foreign Trade (DGFT). Once your application is approved, you will be issued an export licence for goods up to a specified value.

2. Register with the Customs Authority: Once you have obtained your Export Licence, you will need to register with the customs authority in India. This can be done online through the e-Sugam portal. You must submit your registration documents and pay the applicable fees to complete this step.

3. Classify Your Goods: The next step is to classify your goods according to their Harmonized System (HS) code. The HS code is used by customs authorities worldwide to determine duties and taxes payable on imported goods. You can find the HS code for your interests online or contact a local classification society such as the Federation of Indian Export Organizations (FIEO).

4. Apply for an Export Declaration: Once you have classified your goods, you must apply for an export declaration form from the Indian customs authority. This form must be completed and submitted along with your shipping documents and associated fees to obtain customs clearance.

5. Submit Shipping Documents: The next step is to submit your shipping documents. You must provide evidence of origin certificates, commercial invoices, bills of lading and other relevant documentation to clear your shipment at French customs.

6. Pay Duties and Taxes: The final step is to pay any applicable duties and taxes on the imported goods. This can be done online through the e-Sugam portal before or after goods enter France. Once the payment has been made, you will receive a bill of entry that proves that all duties and taxes have been paid.

By following these steps, you should be able to complete an export process from India to France legally and without any issues. However, it is always recommended that you seek professional advice before beginning the process in case of any unforeseen complications or delays.

Factors Influencing Profitability of Indian Exports

There are many factors influencing the profitability of Indian exports to France. The country’s competitive advantage in terms of price, quality and delivery time is the most important factor. India has a long-established reputation as a reliable and cost-effective supplier of goods and services, which gives it a strong competitive advantage in the French market.

Other important factors include:

  • The increasing demand for Indian products in France.
  • The growing preference for Indian brands among French consumers.
  • The favourable trade agreements between India and France.

The increasing popularity of online shopping in France is also providing a boost to Indian exports.

These factors are creating a very favourable environment for Indian exports to France, and we expect that the trend will continue in the coming years.

Trade Relationships and Agreements Between India and France

France and India have enjoyed strong trade relations for many years. In 2016, France was India’s 9th largest trading partner, with bilateral trade totalling $13.4 billion. Indian exports to France include pharmaceuticals, textiles, leather goods, gems and jewellery, and engineering products. France is a leading investor in India’s economy, with a cumulative investment of over $15 billion since 2000.

The two countries have strong economic ties and work together to promote global trade and investment. In addition, to close trade relations, the two countries have also signed several agreements to promote economic cooperation jointly. These agreements cover areas such as Double Taxation Avoidance (DTA), Bilateral Investment Promotion and Protection (BIPPA), Air Services Agreement (ASA), Economic Partnership Agreement (EPA), Technical Cooperation Agreement (TCA), etc.

Both countries are members of the World Trade Organization (WTO) and are parties to the General Agreement on Tariffs and Trade (GATT). The WTO provides a forum for member countries to negotiate and settle trade agreements. GATT is a multilateral agreement that regulates international trade in goods. India and France also comprise the World Intellectual Property Organization (WIPO).

Conclusion

India has a lot to offer France in the form of Lucrative Exports. From processed food and wood products to precious minerals and leather goods, there are plenty of items that Indian companies can sell to French buyers for great profits.

We hope this article has helped you understand what type of goods offer the most promise when Exports from India to France. With so many opportunities for growth available, it’s time for more business people and entrepreneurs in India to explore the potential of selling their wares abroad!

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