A small group of traders are exploiting the difference between the prices of onions markets in India and Bangladesh, a senior Indian official said today.

Last week, the Indian government banned onion exports until March 2024 following the prices of the staple commodity crossing Rs 80 per kilogramme in most retail markets and hovering near Rs 60 per kg in wholesale markets.

India's Consumer Affairs Secretary Rohit Kumar Singh said in New Delhi that the export ban would not impact the farmers and a small group of traders are the ones who are exploiting the difference between the prices in Indian and Bangladesh markets.

Around 9.75 lakh tonnes on onions have been exported in between April 1 and August 4 in the ongoing financial year with the top three importing nations in terms of value being Bangladesh, Malaysia and the UAE.

The onion component in India's Consumer Price Inflation (CPI) basket has remained in double digits since July, increasing to an almost four-year high of 42.1 percent in October.

Before banning the exports, the Indian government, in an attempt to keep onion prices in check, imposed a minimum export price (MEP) of $800 per tonne on exports on October 28 until the end of 2023.

Earlier in August, India imposed a 40 percent export duty on onions until December 31 this year.

Singh said the government anticipates a fall in onion prices to below Rs 40 per kg by January from the current average price of Rs 57.02 per kg.

"Somebody, said it (price of onion) will touch Rs 100 per kg. We said it will never cross Rs 60 per kg. So, all India average is now Rs 57.02 per kg this morning and it will not cross Rs 60 per kg," the official said on the sidelines of the Deloitte Growth with Impact Government Summit'.