In a letter to the Commerce Ministy, Food Minister Ram Vilas Paswan suggested a ban on onion exports, before allowing the vegetable's imports, to boost domestic supply and check prices.
Paswan wrote that onion exports had declined marginally when the Minimum Export Price (MEP) was introduced by the government at $ 300 per tonne last month, with a further increase of $ 500 per tonne early this month. However, there was a need to curb the continued onion export before allowing imports.
MEP is the rate below which no exports are allowed. Last month, the MEP was re-introduced barely three months after the previous government in March had abolished it.
Commerce Minister Nirmala Sitharaman had sought the Food Ministry's view on importing one lakh tonnes of onions, senior officials said.
Onion prices have been rising due to speculation amid anticipation of below normal monsoon despite sufficient supplies in the country.
The wholesale price of onion at Lasalgoan in Maharashtra - Asia's largest onion market - increased by over 50 per cent to Rs 20.15 per kg on July 17, from Rs 13.25 per kg on the same day last month.
Retail prices of the bulb have almost doubled to Rs 30-40 per kg in the national capital since May.
Onion production is estimated to have risen to 192 lakh tonnes during 2013-14 crop year (July-June), from 168 lakh tonne in 2012-13. Exports, meanwhile, fell to 13.58 lakh tonnes last fiscal from 18.22 lakh tonnes in 2012-13.