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Informist, Thursday, Aug. 20, 2026

 

--Govt allows 1 mln tn raw sugar imports at nil duty until Oct 31 

 

NEW DELHI – The government has scrapped the 100% import duty on raw sugar and permitted 1 million tonnes of the unrefined variety to be shipped into the country at nil duty until the end of October, the Directorate General of Foreign Trade said Thursday. This is expected to improve supplies in the domestic market and cool the record-high sugar prices ahead of the peak festival season. However, the government has not scrapped or reduced the import duty on "white" or refined sugar.

 

"The import policy for raw sugar is amended to allow 10 Lakh MT (metric tonnes) of duty-free imports under TRQ (tariff rate quota) till 31.10.2026," the department said in a notification. Though the sugar season 2026-27 starts Oct. 1, production will only gather pace from November.

 

Sugar prices have been rallying since July but have risen sharply in August amid limited supply and strong purchases by bulk consumers ahead of the peak demand season. Festivals such as Ganesh Chaturthi and Krishna Janmashtami fall in September. Demand is expected to peak ahead of Navratri, Durga Puja, and Dussehra in October, followed by Diwali and Chhath Puja in November.

 

The government order is in line with market expectations, as industry officials had estimated 1 million tonnes of sugar imports would keep the market adequately supplied till November. However, the market was hoping the government would permit duty-free imports of white sugar as well to boost supplies faster. Imported raw sugar will enter domestic market supplies more slowly, as it has to arrive at Indian ports, be refined and then transported to key markets across the country.

 

To improve the supply situation quickly, the government has granted "a one-time option" to convert the raw sugar already imported by Indian refineries for exporting refined sugar. "This will include refined sugar already produced and to be produced out of the imported raw sugar available under the Advance Authorisation," as per the notification.

 

However, Indian refiners must ensure that refined sugar produced from the raw sugar already imported is sold in domestic markets by Oct. 31. "A statement of GST invoices evidencing the domestic sale of Refined Sugar, indicating the quantity of Refined Sugar sold in the domestic market, shall be submitted by the TRQ holders under this scheme on or before the 1st and 15th day of the month, with the final statement to be submitted by 1 November 2026," the department said. 

 

Earlier, only Indian refiners were permitted to import raw sugar at nil duty, but with an export obligation, G.K. Sood, agricultural markets and policy expert, said. "Refineries like Shree Renuka Sugars are allowed to import raw sugar at nil duty, subject to export of refined sugar within six months after furnishing a bond. Now, they are allowed to sell this refined sugar in domestic markets," Sood said.

 

Sood estimates about 100,000 tonnes of sugar can be supplied by coastal refineries through the conversion scheme, and 200,000-300,000 tonnes by other mills with refining capacity by the end of October.

 

To tame surging sugar prices, the government had previously imposed several measures on various stakeholders in the market. Late Wednesday, to curb hoarding, it mandated that bulk buyers can hold inventory of only 15 days. Friday, it had asked mills to despatch stocks within seven days of billing to prevent artificial scarcity. In July, it had imposed a stockholding limit on traders for four months starting August.

 

Despite all these measures, sugar prices have continued to rise in the past few days. Ex-mill prices ranged between INR 5,000 and INR 5,600 per 100 kg in key markets Tuesday, rising further to INR 5,250-INR 5,850 Wednesday and INR 5,450-INR 6,000 per 100 kg Thursday. Sood said the duty-free import notification will "moderate the inflationary expectations" in the market and prices will start stabilising. 

 

The Indian sugar market was influenced by "unjustified price expectations", the All India Sugar Trade Association said in a note. "In such circumstances, trade and industry must ensure that supply chains remain free of bottlenecks, with no stakeholder holding stock beyond what is necessary for smooth functioning," it added.  End

 

Reported by Afra Abubacker

Edited by Rajeev Pai

 

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