Onion-tight Nepal has decided to sound the alarm and request for onions following India’s restrictions on exports.

An unidentified official at the Industry Ministry in Nepal said on December 18 that the government will implore India for onion imports. The government wishes to extend courtesy to Nepal’s onion traders, who have sent in a similar request.

The official said that since the state does not have importation firms, the government’s diplomatic request will aim “to facilitate the [private] importers.”

The gesture by the state to request onions from its southern economic powerhouse is an historical one. Between September 2019 and March 2020, India banned onion exports, which hiked prices in Nepal to NRS 250 ($1.88) per kg. It also prompted an onion price rise across the subcontinent, comprising Nepal, Bangladesh and Pakistan.

A repeat ban followed up in fall 2020 to spring 2021 and prompted the government to negotiate with India. A year later, in 2022, a season of bounty, Nepal shipped home 180,190 metric tonnes of onions from India.

Pressure on the price of the kitchen staple is one of the factors that has enjoined the state with traders. Kathmandu valley, a bustling onion mandi has seen a steep climb in the cost of red onions. By mid-December 2023 the cost hovered between NRS 150 and 160 ($1.13 and $1.20 ) per kilogram.

The quoted retail price is however a reprieve of 33% from NRS200 ($1.5) per kilo that arose on December 8.

In India itself, the retail price has dropped to less than INR 60 ($0.72) a kg. This follows the promise by the agriculture ministry on December 12 that kharif supplies were lessening supply pressure.

The promise of recovering supplies in India may help reduce the mushrooming black market of Indian onions in Nepal.  For instance, at Nepal’s biggest vegetable market, the Kalimati in Kathmandu, imported onions have been trickling in mysteriously.

Binany Shrestha of the Kalimati market told the Kathmandu Post on December 17 that 20 tonnes arrived Sunday with no clear origin. The market usually receives 100 tonnes of onions per week during times of onion glut. 

Pending the request to India, Nepal is also thinking to buy onions from alternative countries. One of these is China, which filled in for the 2020 ban by supplying Nepal with 823 tonnes equal to NRS 42.6 million ($350,352).

Over 99% of Nepal’s onion supplies from abroad come from India, hence the significance of the impending diplomatic request.