Decline in area would affect supply of onion during October-December period and could trigger its price rise in the domestic market.
Onion is selling at Rs 10-15 a kg at present in retail in Delhi and other parts of the country.
"Almost 50 per cent fall is witnessed in sowing area of onion in Nashik in Maharashtra and areas under the crop in Gujarat," R P Gupta, Director National Horticulture Research Development Foundation (NHRDF), an arm of ICAR, told PTI.
Asked if rains now would improve the situation, he said this could help in sowing of late kharif onion which would be harvested only in December.
"Presently we have sufficient stocks of onion which will cater to domestic requirements till October. But, inadequate reinforcement after October due to poor sowing of kharif onion will create shortfall of the crop from October to December," Mr Gupta said.
Sowing of kharif onion that started from July 15 will end by August 15.
The NHRDF Director said presently the country has a stock of around 18 lakh tonnes of onion. About 3-4 lakh tonne of the bulb is required every month for the domestic market besides some amount for export.
Mr Gupta and Chairman APMC, Pimpalgaon, Dilip Rao Bankar said due to poor rain and also lower price of the crop, some farmers in Nashik regions have sown soyabean and coarse grain in place of onion in their field.
A senior officer of agri-cooperative Nafed, which is the principle agency to provide NOC for onion export, said the estimate of onion crop would come only by the end of August.
He said outbound shipment of the root saw only a marginal increase after the government decided to do away with minimum export price (MEP) of the bulb in early May.
The onion export rose by only 32,000 tonnes in the first three months of 2012-13 compared to same period last year.
India exported 4,61,854 tonnes of onions during April- June period this year, according to month-wise data on onion exports collected by agri-cooperative NAFED. In the same period last year, a total of 4,29,802 tonnes were exported.
Gulf countries, Bangladesh, Sri Lanka, Malaysia and Far East are the major destination for Indian onion.