Despite India’s ban on onion exports, the supply in Nepali markets has normalized, with traders attributing it to rampant smuggling. The Kalimati Fruits and Vegetable Market, Nepal’s largest wholesale market, is receiving 60-70 tonnes of onions daily, alleviating prices that had previously spiked to Rs200 per kg. India imposed the export ban on onions until March 31, 2024, leading to increased smuggling in bordering towns. Although the safe mobility initiative is helping some refugees, challenges remain, including limited awareness and eligibility criteria.
The smuggling issue is evident in various incidents, with police seizures of illegally imported onions in different districts. The wholesale price of onions in Nepal hovers around Rs90 per kg, while in India’s Uttar Pradesh, it is Rs49 per kg. Despite the normal supply, onion prices in Nepal have yet to decrease. The customs officials acknowledge the smuggling problem, and while they have allowed small quantities of onion imports, the lack of export clearance documents from Indian customs complicates the process. Nepal imported 180,190 tonnes of onions worth Rs6.75 billion from India in the last fiscal year, with Nashik, Indore, Kanpur, and Gujarat being major sources.
The situation highlights the complexities of cross-border trade and the challenges faced by countries in maintaining control over the movement of goods, especially when faced with export bans and smuggling activities. The reliance on imported onions underscores Nepal’s vulnerability to disruptions in the supply chain, emphasizing the need for diverse sourcing strategies and domestic production initiatives to enhance food security.