Concerned over the fall in onion prices, the government Friday doubled the export incentive for the kitchen staple to boost shipments and ensure better returns for farmers.
At present, onion traders get 5 per cent export incentive on fresh crop under the Merchandise Exports from India Scheme (MEIS).
"The government today increased the export incentives under the MEIS from existing 5 per cent to 10 per cent in the interest of farmers," an official statement said.
This will result in better price for onion in domestic markets. Wholesale prices of onion are "subdued" at present due to increase in the arrival of the fresh crop in the mandis, it said.
"To contain the situation, it has been decided by the government to encourage export of onions so that the domestic prices stabilise," the statement said.
With the current increase, onion enjoys one of the highest incentives for agro-exports. This timely intervention would help the farmers who have recently harvested their produce and who have sowed or recently planted their seeds and expected better prices, it added.
In July 2018, the government had introduced 5 per cent export incentive for fresh onions.