With the sharp fall of onion prices in the Indian markets, the Indian government is planning to review its export ban.

In Nepal too, prices have dropped after supply became normal despite the ban.

Nepali authorities are, however, clueless about how Indian onions are being imported to Nepal.

Some traders whom the Post spoke to said that many traders are importing onions through their contacts and Indian authorities are allowing them to enter Nepal without any restriction.

The onion was traded at Rs80 per kg wholesale at the Kalimati Fruits and Vegetables Market on Sunday.

In retail, it costs Rs100 per kg. The price had reached Rs200 per kg soon after the onion export ban by India on December 8.

The 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.

The export ban has been enforced until March 31.

Traders say that the onion price will come to normal in Nepal soon, as India is considering lifting the ban.

According to Indian media reports, the government is assessing the situation and is likely to reconsider the decision to stem the sharp fall in the prices of the vegetables.

“The government may allow exports of onions through cooperatives,” according to the reports.

Media reports say onion prices in Maharashtra, the state that produces the most onions in India, fell to IRs1,500 per quintal two weeks ago, from IRs3,700 per quintal before the imposition of the shipment ban.

Indian farmers and traders have been demanding the lifting of the ban so that prices do not plummet further.

In Nepal, after India’s export ban, the price has increased but supply has been normal.

The Kalimati market received 75 tonnes of onion soon after the export ban.

On Friday, the market received 82 tonnes of onion.

Traders said that the decline in the price of onion in India coupled with a normal supply has reduced prices in Nepal.

“Onion harvesting season has started in India and hopefully prices will drop in the coming days,” said Binay Shrestha, information officer at Kalimati Fruits and Vegetables Market Development Board.

Nepal depends on India for its onion fulfillment.

Since last year, prices of food commodities—rice, wheat flour, sugar and onions have increased heavily in Nepal due to the changing Indian policy, experts say.

In August, last year, the Indian government imposed a 40 percent export duty on onions.

In the first week of November, ahead of the Tihar festival, onion again became pricier after India slapped a minimum export price to check shipments and ensure adequate supplies for its domestic consumers.

After the minimum export price was slapped, the wholesale price of onion jumped to Rs125 per kg from Rs75 per kg previously.

In mid-November, the price reached Rs150 per kg.

Nepal gets nearly all its onion, a major kitchen staple, from the southern neighbour.

While China is another source of onions for Nepal, the Chinese product is mostly used for making salads, mainly in hotels and restaurants due to which its demand is low.

According to the Kalimati market, the average wholesale price of Chinese onion also declined by 24.29 percent to Rs62.33 per kg last week.

Three weeks ago, Chinese onions were traded at Rs82.33 per kg.

After India's sweeping ban on onion exports, there has been rampant smuggling of the vegetable, traders said.

The district police in bordering areas are seizing hundreds of sacks of onion daily.

The customs officials said that onion smuggling has increased sharply in many of the Nepal-India border points.

The Indian media reported that the smuggler racket has been smuggling onions.

With the export ban on onion, the price of onion has declined in India, but it has fueled smuggling due to the price differences in Nepal.

The wholesale price of onion has been hovering at around Rs80 per kg in Nepal, while the wholesale price in India’s Uttar Pradesh is IRs27 per kg.

The import of onion fell by 38.47 percent in the first six months of the current fiscal year that ended in mid-January.

According to the Department of Customs, Nepal imported 46,592 tonnes of onion for Rs1.93 billion in the first six months of the current fiscal year compared to 86,386 tonnes for Rs3.15 billion in the same period last fiscal year.

Imports from China were 594 tonnes worth Rs40.82 million.

Nepal imported 180,190 tonnes of onions worth Rs6.75 billion from India in the last fiscal year.