Government withdrew 10 per cent export incentives on onion, the government said in a statement on Tuesday, as prices of the bulb jumped 47 per cent in a month due to dwindling supplies.
The south Asian country had doubled export incentives for onion in December following steep drop in prices that angered farmers.
On Tuesday, wholesale price in the country's largest onion trading hub, Lasalgaon in the western state of Maharashtra, was Rs 1,330 per 100 kg, up from Rs 673 at the beginning of the year.
India exports onions mainly to Bangladesh, Malaysia, the United Arab Emirates and Sri Lanka.
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