The government today said it will allow sugar mills more time to comply with export obligations as the priority now was to meet domestic demand.
"We are giving extension...There is no need for them to export...At least for one more year," Food and Agriculture Minister Sharad Pawar told reporters on the sidelines of Indian Council of Agricultural Research function here.
Under the Advance Licensing Scheme (ALS), the sugar mills were allowed to import 21.4 lakh tonnes of raw sugar in 2004-05 season and were automatically obligated to export an equal quantity by December 31, 2009.
However, the mills have fulfilled less than half of their export obligation in the last few years.
With sugar contributing about 20 per cent to food inflation, the Food and Agriculture Ministry is not in favour of insisting to mills to meet their export obligation.
While the Commerce Ministry wants the sanctity of the scheme to be maintained, the government's consideration to give more time to mills seems to have been influenced by the prevailing price situation.