With the country’s sugar production set to exceed domestic demand, the government is likely to reimpose 60 per cent import duty from tomorrow.
“The duty-free notification lapses on Thursday. From April 1, it automatically reverts to the old duty structure,” an official source said.
In early 2009, import duty on sugar was abolished to boost domestic supply in view of a dip in production in the 2008-09 sugar year (October-September). Prior to that, the same stood at 60 per cent. The duty-free regime was valid till on Thursday.
India has imported about six million tonnes (mt) of sugar since February 2009 to meet domestic demand. Production fell to 14.7 mt in 2008-09, as against the annual demand of 22 mt. Output improved to 19 mt in 2009-10. However, it was still short of demand.
In the current sugar year, production is expected to outstrip demand at 24.5 mt and the country has started exporting the sweetener. Domestic Prices have also softened to Rs 30-32 a kg in the national capital from nearly Rs 50 a kg in mid-January 2010.
Recently, the government allowed export of 500,000 tonnes of sugar under the open general licence scheme.
