Sri Lanka has reduced the price of imported Chinese big onions significantly compared to those from India, aiming to alleviate the financial strain on its citizens during the festive season amidst a severe economic crisis. The government, led by President Ranil Wickremesinghe, is working to lower essential commodity prices as the nation prepares for Eid and traditional New Year celebrations. This price reduction is also part of the government's efforts to gain favor with the public ahead of the upcoming presidential election. An export ban on onions by India has exacerbated the situation, causing local onion prices to surge by up to 300 percent, especially after domestic production was affected by heavy rains in late 2023.
China has entered the Sri Lankan market, offering its big onions at a lower price than those from India and Pakistan, through the state-owned retail chain 'Lanka Sathosa.' This price adjustment reflects Sri Lanka's need to find more affordable sources of onions following India's export ban, which aimed to stabilize domestic prices before its parliamentary elections. The high cost of onions has been a significant issue in Sri Lanka, where festivals have been subdued since 2019 due to economic challenges and the COVID-19 pandemic.
The competition between China and India in Sri Lanka extends beyond onion imports to strategic infrastructure projects and commodities like fuel. China's involvement, particularly through the construction of a major refinery and control over Hambantota port, alongside fuel retailing rights granted to Sinopec, contrasts with India's longstanding influence and concerns about Chinese activities in the region.