The Central Board of Indirect Taxes and Customs (CBIC) on Saturday imposed a 40% customs duty on onions exported out of India amidst rising prices.

The export duty will be in force till 31 December, 2023, said an order. The decision is taken in public interest, said CBIC.

"To improve the domestic availability of onions, government imposes 40% export duty on onions with immediate effect upto December 31, 2023," the Finance Ministry said in a notification.

The move comes amidst reports of prices of onions likely to rise in September  and the government's attempt to combat rising prices in domestic grown vegetables. 

The government had earlier placed restrictions on the export of wheat and rice and had reduced the import duty on edible oils.

"The export duty will make Indian onions more expensive than those from Pakistan, China, and Egypt. This will naturally lead to lower exports and aid in reducing local prices," said Ajit Shah, an exporter based in Mumbai.

As per the data recorded by the consumer affairs ministry, the all-India average retail price of onion was Rs 30.72 per kg on Saturday, with a maximum price at Rs 63 per kg and a minimum at Rs 10 per kg.

This year even after an ample stock of onions in the country, a high proportion of onions have gotten bad due to a prolonged period of severe heat in March-April this year which has made good quality onions expensive, they said.