The government also halved export duty on onion to 20 per cent from 40 per cent.
The duty cut is effective from September 14.
The 40 per cent export duty had been in place since May 4.
The decisions, including removal of the Minimum Export Price (MEP) on both onion and basmati rice and cut in the export duty, came ahead of assembly elections in Maharashtra and Haryana.
Haryana along with Punjab is the major producer of basmati rice.
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