India Imposes a 40% Tax on Onion Exports as Inflation Continues to Rise in 2023

India's Prime Minister imposed a 40% tax on onion exports to control rising prices and inflation ahead of elections. This tax is effective immediately and will remain in place until the end of 2023. The goal is to increase the availability of onions within the country. India's inflation surged to a 15-month high of 7.44% in July, prompting the government to take action to control soaring food prices. Onions have been a significant issue in national politics and have even led to the downfall of governments in the past. In Delhi, the retail price of onions has risen by 17% since January 1, reaching USD 0.42/kg (INR 35/kg) on August 18. The government has already implemented measures to control food prices, such as restricting the export of certain rice varieties and considering removing the 40% import tax on wheat to lower local prices.