Onion shortage: Nepal grapples with shortfall as India Imposes 40% tax

Nepal is grappling with a severe onion shortage, a consequence of India's imposition of a 40% export tax on the vegetable. This move, aimed at curtailing overseas sales and anticipating a pre-festival season price surge, has left Nepal vulnerable due to its heavy reliance on Indian onion imports.

Traders in the Kalimati Fruit and Vegetable Market, Nepal's largest wholesale agricultural market, reported a sudden scarcity of onions. The situation has been exacerbated as no onion shipments have been received since the weekend, and existing stocks were depleted by Monday. Prices have surged from Rs 54 per kg to over Rs 100 per kg in the Kathmandu Valley.

Given Nepal's dependence on Indian onions, the export duty has caused domestic shortages. This scarcity is especially challenging during Nepal's festive season, characterized by heightened onion consumption for local cuisine. The absence of weekend deliveries from India and the additional 40% tax on upcoming shipments have contributed to the crisis. Consequently, the wholesale price of onions surged to Rs 78 per kg at the Kalimati market.