An Empowered Group of Ministers (EgoM) on Tuesday lifted the ban on onion exports to help farmers, said Food Minister K.V. Thomas.
The government banned onion exports on September 9 to control rising prices, which touched Rs.25 per kg.
Maharashtra Nationalist Congress Party chief Madhukar Pichad had written to Prime Minister Manmohan Singh and Commerce Minister Anand Sharma, demanding withdrawal of the ban on onion exports.
Onion farmers from Maharashtra had also approached Agriculture Minister Sharad Pawar, saying the ban had affected prices of the commodity.
A high-level delegation from Maharashtra led by state Agriculture Minister Radhakrishna Vikhe Patil too last week met top union ministers, including Finance Minister Pranab Mukherjee, seeking removal of the ban.
Pawar had pointed out that arrival of onions in vegetable markets in September was lower than the same period a year ago, but said the overall onion production is expected to be good.
According to officials, the wholesale price of onions declined from Rs.1,000 per quintal before the ban to Rs.600 per quintal in major mandis of Nashik in northern Maharashtra, the main centre of onion trade.
All the onion markets in Nashik district of Maharashtra, the country's biggest onion-producing state, have remained closed since September 9 in protest against the export ban.
India's onion production is estimated at 151.36 lakh tonnes in 2011-12, which is higher than the previous year's output of 145.62 lakh tonnes.