Bangladesh Diversifies Onion Imports as Indian Exporters Lose Ground

India faces a shrinking market next door

Bangladesh bought about 724,000 tonnes of Indian onions in 2023 to 2024, roughly 42 percent of India's total onion exports. By November 28, 2025, that crucial trade relationship was under pressure: trade estimates indicated a sharp fall in purchases during 2025 to 2026 as Dhaka tightened import permissions and sought more suppliers.

Indian exporters were facing their toughest season in years. Bangladesh was exploring supplies from Pakistan and China, Saudi Arabian buyers had turned increasingly to Yemen and Iran, and the Philippines tended to order from India when Chinese shipments were scarce. Repeated Indian export restrictions, intended to keep onions affordable at home, had encouraged overseas customers to build other supply routes.

For growers in Maharashtra and Karnataka, losing buyers abroad matters most when harvests peak. Export orders help absorb onions that would otherwise crowd domestic markets. When those orders slow, farmers can face falling prices just as they need to sell crops with a limited storage life.

Bangladesh's approach combines three measures: finding alternative suppliers, controlling imports around its own harvests, and improving domestic production and storage. Indian exporters also fear that the movement of Indian onion seeds across borders is helping competitors grow more onions themselves, potentially reducing their need for Indian supplies over time.

The pressure reaches beyond the number of trucks crossing the border. Farmers need prices that cover their costs, exporters need dependable rules to fulfil contracts, and importing countries want supplies that will arrive when promised. India's attempts to protect consumers during shortages have made that balance harder to maintain across several markets.

Why Bangladesh has been such a valuable buyer

Bangladesh's proximity to India gives the onion trade a practical advantage. Short trucking routes and established border trade keep transport costs low and deliveries quick. Speed matters because moisture, handling and storage conditions can change onion quality within days.

Indian onions accounted for well over half of Bangladesh's imports in many years earlier in the decade, according to estimates, with the share even higher during some tight seasons. That measure describes India's share of Bangladesh's imports. The 42 percent figure for 2023 to 2024 describes how much of India's total onion exports went to Bangladesh.

Local onions supply most of Bangladesh's annual consumption, but losses during storage create gaps that imports help fill. When Indian export policy is predictable, shipments can help steady prices in trading centres such as Dhaka's Karwan Bazar and Chattogram's Khatunganj.

Nashik onions are valued for their pungency and consistent quality, particularly by hotels and food service businesses. Large auction markets in Nashik, Lasalgaon and Pimpalgaon bring together supplies from growers and establish benchmark prices for the region. These markets, often called mandis, are where the effect of weaker export demand becomes visible.

Indian growers depend on those markets to move their harvests. If overseas orders stall, more onions remain available for domestic buyers. During peak arrivals, the extra supply can push auction prices below production costs, leaving farmers with little room to recover the money spent growing the crop.

How export controls changed buying decisions

India has repeatedly restricted onion exports when domestic prices rise following heavy rain, pest problems or storage losses. Onions are an important part of food inflation, so the government uses trade controls to keep more supply at home and ease pressure on consumers.

A nationwide ban on exports of fresh onions in September 2020 followed crop damage caused by excessive rain. In later seasons, export duties and licensing were used to manage domestic prices. A duty adds a charge to an export shipment, increasing its cost for buyers abroad.

In one policy cycle, a 40 percent export duty immediately changed the calculations facing traders. During parts of 2025, controls included duties in the 30 to 40 percent range, quotas for selected exporters and special permissions for bulk shipments. Quotas limit how much can be shipped, while permissions determine which shipments can proceed.

Those measures eased local prices, but foreign customers responded by looking for suppliers that could provide more dependable deliveries. Some alternatives were more expensive or harder to transport. Buyers nevertheless had a reason to develop them: a cheaper order has less value when changing rules interrupt its arrival.

India's recent policy changes formed part of a longer pattern:

• September 2020: India prohibited exports of fresh onions after excessive rain damaged crops.
• Later seasons: Export duties and licensing became recurring tools for managing domestic prices.
• 2023 to 2024: Bangladesh purchased about 724,000 tonnes, or 7.24 lakh tonnes, representing roughly 42 percent of India's onion exports.
• Mid January 2025: Bangladesh introduced a 10 percent import duty on onions.
• During parts of 2025: Indian controls included duties of 30 to 40 percent, quotas for selected exporters and special shipment permissions.
• 2025 to 2026: Trade estimates indicated a sharp decline in Bangladesh's purchases as import approvals tightened and sourcing widened.

Bangladesh faces higher costs and tighter approvals

Bangladesh felt the effect of India's export duty within days. Wholesale and retail onion prices increased as importers paused orders and calculated the new costs. Traders described wide gaps between prices agreed in earlier contracts and the cost of bringing shipments into Bangladesh after the duty.

Retail prices in Dhaka and Chattogram rose from week to week. Locally grown onions also became more expensive as expectations about future supply changed. Bangladesh then allowed imports from Myanmar and China and issued new permits to ease the shortage, helping prices moderate after a delay.

Dhaka's own 10 percent import duty, introduced in mid January, added another layer to the price calculation. Indian exporters argued that charges on both sides of the border made their onions less competitive at a time when arrivals of late kharif onions were increasing in markets such as Lasalgaon.

Bangladesh has also slowed permissions for Indian supplies at times while trying to match imports with local harvests. This approach seeks to manage the timing of foreign arrivals alongside domestic production. Traders, however, have said that older stocks were running thin at certain points and sought clear approvals before the local crop arrived.

Farmers in India faced immediate pressure because kharif and late kharif onions keep for only a short time under ordinary ambient conditions. When export orders are delayed, they cannot always hold their harvest until prices recover. Selling quickly may bring a poor return, but waiting can mean losing onions to rot.

Pakistan, China and other suppliers gain openings

Bangladesh's trade planners have prepared a broader sourcing list for both onions and potatoes. Cost comparisons identify China, Pakistan and Turkey as possible onion suppliers, with prices per unit changing according to the season and transport arrangements.

Myanmar and China have often filled gaps when India restricted exports. Pakistan has also become a practical option, a meaningful change given the limits in diplomatic ties over the previous decade. During earlier supply crises, Bangladesh arranged onion purchases from Pakistan at government level after long gaps in trade.

Saudi Arabian importers have reduced purchases from India and relied more on Yemen and Iran during recent Indian restrictions. Those trading relationships give Gulf buyers alternatives to Indian supply and could continue if India's export rules remain unpredictable.

The Philippines follows a different pattern, drawing first on China and tending to buy Indian onions when Chinese shipments are tight. Established relationships with buyers and supplies available throughout the year work in China's favour in several Asian markets.

Weather still affects the alternatives. Heavy rain in Pakistan's Sindh region disrupted supply and lifted prices at times during 2025, while unseasonal rain in western India delayed arrivals of red onions. Buyers are spreading purchases across several origins so that a disruption in one country leaves them with other options.

Pakistan's growers have gained a larger opportunity to sell into Bangladesh and the Gulf, but flooding can interrupt that advantage. For India, competition now comes from both established suppliers and trading routes strengthened during periods when Indian onions were restricted.

Seeds and storage shape Bangladesh's ambitions

Indian exporters worry that onion seeds moving into neighbouring countries are helping competitors increase production. They say improved seed and farming knowledge are lifting yields in Pakistan and Bangladesh, which could reduce imports from India as local crops meet more demand.

Vegetable seed movement is difficult to police across open borders. Traits such as the taste associated with Nashik red onions can travel with seeds and with growers familiar with Indian cultivation methods. Exporters view this as a longer term threat to market share, alongside the immediate loss of orders caused by trade controls.

Bangladesh is also seeking to reduce the amount of produce lost after harvest. Weak handling practices and a lack of modern storage cause a large share of its onion crop to spoil. Even a good harvest can leave the country needing imports later if too many onions fail to survive storage.

Better storage would allow traders to buy during peak arrivals and sell during lean months, helping keep prices steadier. Modern cold storage investments have improved outcomes for potatoes in Bangladesh. Extending suitable technology and financing to onions is a policy priority for Dhaka.

Bangladesh's Agriculture Secretary, Dr. Mohammad Emdadullah Mian, outlined the government's ambition at a recent seminar in Dhaka. He described plans to increase production and storage while enforcing financial discipline in agricultural projects, and linked reduced import dependence to fair returns for farmers.

Bangladesh aims to achieve self sufficiency in onion and ginger within three years, with a view to halting imports. Farmers deserve a fair price for their produce, and policy will reflect that.

Achieving that goal would require improvements in seeds, mechanization, storage and connections between farms and markets. Import permissions, tariffs and domestic procurement would also need to follow harvest calendars through coordination across ministries. The three year ambition was announced without an exact completion date.

Bangladesh currently needs substantial imports during lean months. Increasing the amount grown locally and preserving more of each harvest would reduce those seasonal gaps. For Indian exporters, this means that restoring shipments depends on both trade policy and the pace of Bangladesh's agricultural investment.

Farmers feel the pressure at Lasalgaon

Lasalgaon has seen daily onion arrivals rise from about 15,000 quintals to more than 20,000 quintals on busy days, with further increases expected at the peak. A quintal equals 100 kilograms, so those figures represent roughly 1,500 tonnes and more than 2,000 tonnes respectively.

The increase is more than one third compared with the earlier daily figure. Combined with weaker access to export buyers, that larger flow of onions puts pressure on the prices farmers receive at auction.

Wholesale prices have fallen steeply from December levels. Growers warn that returns could drop below average production costs if export channels remain clogged. For farmers selling fresh kharif and late kharif onions, the short storage life makes the timing especially difficult.

Farmers cannot treat every harvest as stock that can safely wait for months. Warm conditions shorten the selling window for these onions, and deterioration can turn a delayed sale into a physical loss. Export demand is therefore particularly valuable when arrivals rise rapidly.

Maharashtra and Karnataka growers face the wider effects of this squeeze because they rely on export demand during heavy harvests. Restrictions that protect consumers when supply is scarce can become painful for producers when markets are receiving more onions than domestic buyers readily absorb.

Exporters face costs beyond lost sales

Indian exporters say sudden changes in duties and shipment permissions force contracts to be renegotiated or cancelled. Those interruptions can bring penalties, leave packing facilities idle and weaken confidence among overseas customers.

A buyer arranging food supplies needs to know the price, quantity and delivery timing. When an exporter's ability to deliver changes after an agreement is made, the buyer has a reason to place future orders elsewhere. Repeated interruptions make lasting commitments harder to secure.

Bangladesh and Gulf markets once provided relationships that helped absorb Indian supply and support domestic price stability. Exporters now face fewer commitments extending far into the future with those traditional partners, making it harder to plan purchases from growers and use packing capacity efficiently.

Yemen and Iran have gained working links with Saudi buyers, while China remains the preferred supplier for several Asian markets. Regaining an order after restrictions ease is one task. Persuading customers to depend again on India for a large share of their supplies is a broader commercial challenge.

Predictable rules and better quality are priorities

Indian growers and exporters are calling for a clear calendar of export rules and transparent triggers for duties or quotas. Knowing when controls may change would help businesses price contracts and arrange deliveries with fewer sudden surprises.

They also want a rapid process to review and reduce duties when domestic arrivals surge. During late kharif peaks, lowering restrictions in response to rising supply could help steady mandi prices while keeping export routes open before storage losses mount.

Some Indian packers are investing in QR codes that provide details about farm origin, pesticide data and transit times. This is traceability: a buyer can follow where an onion came from and how it moved through the supply chain. Such information matters to supermarket chains in Europe and parts of Southeast Asia.

Providing that information adds costs in the short term, but it can open access to orders with higher value and less sensitivity to seasonal price swings. Better grading, improved packing facilities near ports and varieties suited to customer preferences can also support India's reputation for consistent quality.

Rebuilding confidence in Bangladesh would require dependable supply and fair pricing. Exporters could develop agreements covering longer periods with flexible terms for weather disruptions, supported by insurance and sourcing from different parts of India.

Indian exporters have also asked the government to restrict onion seed movement into competing markets. Any restrictions would need to be considered alongside research goals and rules governing private seed trade. Investment in improved Indian varieties, protection of intellectual property and closer monitoring of seed flows offer another route for addressing their concerns.

Storage and coordination matter on both sides

India, Pakistan and Bangladesh all face weather disruptions that can unsettle onion production. Export restrictions are a recurring response to domestic price pressure, while importing neighbours react by finding new suppliers and investing in their own crops.

That cycle can continue even after prices settle. Buyers retain the relationships they built during a shortage, and farmers in alternative supplying countries have an incentive to serve those markets. The next weather disruption can then alter trade routes again.

Regional discussions about seasonal requirements, shared information on crop progress and emergency supply arrangements could help countries manage shortages with fewer sudden interruptions. These measures would need to work alongside national decisions about imports, exports and farmer prices.

Storage and transport investment address another part of the problem: keeping harvested onions usable until consumers need them. For Bangladesh, preserving more local produce supports its ambition to reduce imports. For India, better handling and dependable export channels help prevent peak harvests from becoming a period of damaging losses.

Bangladesh's diversification is already putting pressure on Indian exporters, while its production and storage plans point to a possible further reduction in demand. The immediate priorities remain practical: maintain supplies for consumers, give farmers a fair chance to recover their costs, and make trade commitments dependable enough for buyers to keep placing orders.

Key Points

• Bangladesh bought about 724,000 tonnes of Indian onions in 2023 to 2024, roughly 42 percent of India's onion exports.
• Trade estimates indicated a sharp fall in Bangladesh's purchases during 2025 to 2026 as approvals tightened and sourcing widened.
• Indian restrictions included an export ban in September 2020 and duties of 30 to 40 percent during parts of 2025.
• Bangladesh introduced a 10 percent onion import duty in mid January 2025 and managed approvals around local harvests.
• Bangladesh explored China, Pakistan and Turkey, while Myanmar and China had filled earlier supply gaps.
• Saudi buyers turned increasingly to Yemen and Iran; the Philippines tended to buy Indian onions when Chinese supplies were tight.
• Lasalgaon arrivals rose from about 15,000 quintals daily to more than 20,000 quintals on busy days, adding pressure to farmer prices.
• Bangladesh announced an ambition to achieve self sufficiency in onions and ginger within three years through better production and storage.
• Indian exporters sought predictable rules, improved quality and traceability, and closer attention to seed movement across borders.