The government increased import duty on sugar to 50% to curb dumping of the commodity in India as international prices fell.
The industry expects the move to prevent a build-up of arrears in payments to sugar cane farmers in the next season starting October 2017.
Import duty on raw sugar, refined or white sugar that is imported by bulk consumers under tariff head 1701 will increase from the present 40% to 50% with immediate effect, the Central Board of Excise and Customs said in a notification dated July 10. No end date was specified for the duty increase.
The government set the fair and remunerative price (FRP) of sugar cane at Rs255 per quintal for sugar season 2017-18.
“The hike has come in time. It will safeguard the industry,” said T Sarita Reddy, president of the Indian Sugar Mills Association. “If we had imported more sugar, it would have led to collapse of the industry and prices would have gone down drastically.”
Reddy said there was good availability of sugar in the country following the duty-free import of 5 lakh tonnes, which ensured domestic prices were under check. The government allowed the import of the restricted quantity of raw sugar at zero duty by millers/refiners with their own refining capacity to maintain domestic prices at reasonable levels. This would help the sugar industry to augment its liquidity and enable payment of dues to cane farmers.