With India's sugar production set to exceed domestic demand, the government has decided the zero duty regime on sugar imports to lapse, which in effect will restore 60% duty on the sweetener.
Import duty on sugar was abolished in early 2009 to boost domestic supply as there was a shortfall in output in 2008-09 sugar year (October-September). Before that, the duty on sugar import was 60%.
According to senior government official, there is no need for a fresh notification with the validity of duty-free import notification (on sugar) lapsing on 1st January 2011. It will automatically revert to 60% duty. If required, government can seek a reduction in duty later.
India had imported about six million tonnes of sugar since February 2009 to meet domestic demand. Sugar production of India, the world’s second largest producer, had declined to 147 lakh tonnes in 2008-09 against the annual domestic demand of 230 lakh tonnes. In 2009-10, the production improved to 190 lakh tonnes, but it was still short of demand.
However, in the current sugar year, the production is expected to rise to 245 lakh tonnes and the country has now begun exporting the sweetener. Prices have also softened to Rs.30-Rs.32 per kg from nearly Rs.50 per kg in mid-January.
On sugar exports, the official said the government will notify the procedures for export of five lakh tonnes of sugar under the open general licence (OGL) scheme next week.
Food and agriculture minister Sharad Pawar had announced that the government will allow regular export of five lakh tonnes of sugar to benefit from high global prices. He had also said that the food ministry will work out the export procedures in 10 days.
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