India scraps export duty on sugar to lift local prices

The Indian government yesterday withdrew the 20 percent export duty on sugar in a bid to boost sales abroad and lift domestic prices amid surplus production in the world's second largest producer of the sweetener.

A notification on scrapping the export duty was issued by the finance ministry which said the estimated revenue implication of the move is Rs 75 crore for a year at the current export volumes.

Sugar production in India is estimated to rise sharply to 29.5 million tonnes in 2017-18 marketing year (October-September) from 20.3 million tonnes in the previous year. The domestic demand is 24-25 million tonnes annually.

Indian Sugar Mills Association (ISMA) and the National Federation of Cooperative Sugar Factories had long been urging the government to scrap the export duty to help them sell the surplus stock and arrest the falling prices in the domestic market.

In February this year, the government had doubled import duty on raw and refined sugar to 100 percent to check dumping of heavily-subsidised sugar from Pakistan and protect cane farmers at home when domestic production was expected to exceed output.