Free Trade Zones

How governments play ‘freedom and restriction’ games with farmers

On September 14, 2020, the Center imposed a ban on exporting all varieties of onions out of the country. A consequence of this was that hundreds of trucks loaded with onions were stuck at various land ports in West Bengal because they could not get to Bangladesh. Each truck needed an “export order” (LEO) issued by the Central Council of Indirect Taxes and Customs in order to cross to the neighboring country.

It was not the first time that such an export ban was imposed by the Center. Exactly a year earlier, the Ministry of Commerce issued a circular dated September 29, 2019 saying that the export of onions was banned until further notice. It had issued this circular by virtue of the powers conferred on it by the 1992 law on foreign trade.

Agriculture may be the responsibility of the State, but the restriction on the export of agricultural products is the prerogative of the Center. At the time of this export ban, the Prime Minister of Bangladesh was on an official visit to India. She joked in Hindi, “thoda dikkat hua” jokingly, adding that she had asked her cook to use less onions. It wasn’t as if the bulb was going to upset bilateral relations between neighboring nations (other bigger issues like “termites” were more likely to do so), but it is clear that onions had also entered them. foreign policy deliberations. And at that time, not to be outdone, Delhi’s chief minister announced that he would donate onions to every household for just 24 rupees a kilo, a sign of his government’s generosity.