• UGI USER
  • Dec 09, 2023
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Centre bans export of onions

News

  • Onion exports are prohibited by the central government through March 2024.
  • The main goal of the action is to maintain price stability and guarantee sufficient supply of onions in domestic markets.
  • In support of this, the Directorate General of Foreign Trade (DGFT) released a notification and it became operative yesterday.
  • The notification further stated that exports of onions will be permitted in accordance with the authority that the Center grants to other nations upon request from their respective governments.
  • Need for such ban:
    • Governments use trade restrictions, along with other policy tools like export duties, as essential tools to control the movement of goods across national borders.
    • These actions are frequently taken to accomplish a range of strategic and economic goals, especially when it comes to essential commodities.
    • Howsoever, a complete ban on essential commodities, such as agricultural products, can have unintended consequences as they can be useful in achieving some goals, such as revenue generation and price stabilization, their implementation must be done carefully to prevent unfavorable outcomes like decreased exports, trade disputes, and market distortions.
Essential Commodities: The Essential Commodities is not define anywhere, but the Essential Commodities Act, 1955, Section 2(A), has list of a commodities and they can considered as “essential commodity.”

Essential Commodities Act 1955

●   The Act grants the national government the authority to amend or remove a good from the Section 2(A).

●   In consultation with state governments, the Center may designate an item as essential if it is convinced that doing so is necessary to protect the public interest.

Directorate General of Foreign Trade

●   About: The Directorate General of Foreign Trade (DGFT) organization is led by the Director General of Foreign Trade and is an attached office of the Ministry of Commerce and Industry. Its primary responsibility is to promote India’s exports through the formulation and implementation of the Foreign Trade Policy.

●   Headquarters: New Delhi.

●   Major Functions: Import and export license; exports and imports regulation, restriction, or prohibition. It also provides policy recommendations to the government regarding domestic and global economic situations.