New Delhi : In a move that could lead to increase in sugar prices, the government hiked the import duty on both raw and refined sugar to 25% from the existing 15%, reports PTI.
The increase in duty would make imports unviable and may lead to some jump in domestic sugar prices that could cause burden on consumers but would help revive the business of cash-starved mills who owe farmers around Rs 6,800 crore. India has been importing sugar in small quantities taking advantage of lower global prices.
The higher duty will also be applicable to bulk consumers who import raw sugar, the government said, adding that this has been done in public interest. The Food Ministry had recommended increase in import duty on sugar to 40 per cent. “However, the Finance Ministry has hiked the duty marginally, considering inflationary concerns and to give some relief to domestic millers,” a senior Food Ministry official told PTI.
Currently, domestic sugar prices are ruling stable in the range of Rs 34-40 per kg in view of surplus stocks, as per the data maintained by the Consumer Affairs Ministry. Sugar mills are facing a cash crunch as domestic prices have slipped below the cost of production, hurting their profits.