09 January 2024, New Delhi: The Indian government is working on a plan to create regional onion stockholding centers to address supply chain vulnerabilities and reduce dependence on Nashik, Maharashtra, as the primary storage hub. The move aims to stabilize prices during shortages and ensure consistent availability across the country. This decentralized approach is expected to minimize transportation costs incurred in delivering onions from Nashik for market interventions, such as discounted sales through NAFED and NCCF, and releasing buffer stocks into wholesale markets. Discussions on the initiative are underway with the Ministry of Agriculture.
India has witnessed a decline in onion production, dropping from 31.6 million tons in FY22 to 24.2 million tons in FY24, while household consumption remains steady at 19.3 million tons annually. The centralized storage system in Nashik has been identified as a critical bottleneck, prompting the government to explore potential locations for new stockholding centers. Proposed regions include Delhi NCR, Ranchi, Guwahati, Rajasthan, Madhya Pradesh, Karnataka, and Gujarat.
The plan for FY25 includes procuring 475,000 tons of onions for buffer stock. Transportation from Nashik to other parts of the country currently takes 5-6 days by truck and 2-3 days by train. The government is assessing the feasibility of establishing storage facilities through public-private partnerships or by upgrading existing infrastructure.
In September 2024, the government began selling onions at reduced prices of $0.42/kg to counter rising market rates. Experts, including Rakesh Arrawatia from the Institute of Rural Management Anand, Gujarat, have stressed the importance of efficient storage solutions to reduce wastage and improve the availability of perishable commodities like onions. Strategic investments in warehousing infrastructure are expected to play a key role in addressing these challenges and ensuring supply stability.
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