Unintended Consequences: The Rise of Illicit Onion Trade Amidst Export Bans

Mintec Global
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Onion Export Ban!

India’s onion export ban has inadvertently spawned a clandestine trade network. Due to this, traders seize the opportunity to capitalize on the soaring demand for onions in international markets. The age-old smuggling record has taken a twist, with onions emerging as the new gold.

Despite government restrictions, unscrupulous traders surreptitiously employ ingenious methods to transport onions abroad. From concealing the bulbs in grape crates to passing them off as tomatoes, these individuals go to great lengths to evade detection and exploit the lucrative market for this pungent vegetable.

The Impact Of Onion Smuggling

A source intimately involved in the onion trade revealed that smuggling activities surged following the government’s export ban announcement in December. Traders exporting mixed vegetable containers to destinations like Dubai and other Gulf countries strategically sneak onions into their shipments. The profit margin from a single container is highly lucrative, making it an attractive venture for these daring players.
Onion smuggling is not confined to international shipments alone. It permeates neighboring countries like Bangladesh, Nepal, and Bhutan, utilizing small tempos for transport.

The porous land borders facilitate this illicit trade, and despite appeals from the Horticulture Produce Exporters Association (HPEA), authorities have taken limited action. Shockingly, it is estimated that only five percent of smuggled onions face interception, highlighting the formidable challenge of curbing this confidential trade.

Export Ban Fuels Onion Illicit Trade

The ban on onion exports, imposed in response to unseasonal rains causing crop damage and increased humidity, has inadvertently fueled the illicit trade. The chairman of the Central Board of Indirect Taxes & Customs (CBIC) recently disclosed a thwarted attempt to export 82.93 tonnes of onions illegally. In an attempt to avoid detection, exporters falsely declared the goods as tomatoes. On the other hand, the president of the Maharashtra State Onion Producer Farmer Organization expressed concern that export bans catalyze onion smuggling networks. Market analysts also highlight the unintended consequences of the export ban. It has led to a surge in onion prices in various countries, further incentivizing and sustaining the illicit trade.

In conclusion, the onion underworld has become a complex and lucrative venture for daring traders. The unintended consequences of export bans have only intensified this clandestine trade. Therefore, it poses a significant challenge for authorities to control and eradicate.

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