The India government is considering reducing its import levy on sugar after a two-year-old duty-free import exemption expired on 31 March, restoring the old punishing rate of 60%.
With global sugar supplies tight and prices high, the country’s consumer affairs, food and public distribution ministry has proposed reducing the duty to 15%.
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An official said this would help ease India’s high rates of food price inflation, running at 9.18%, albeit down from a record 18% in 2010. While discussions on lowering the rate are held, the existing 60% rate will stay.
Sanjay Manyal, a research analyst at Mumbai-based finance company ICICI Securities, predicted a duty cut would not have short-term implications but could help the country deal with future sugar shortages.
“The current [domestic] production of sugar is 24.5m tonnes,” Manyal told just-food. He said imports would be needed if “production levels dip below 22 million tonnes”, which is not anticipated this year.
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