The government has removed a duty free import scheme for raw sugar, a move aimed at curbing supplies from overseas.
"Import of raw sugar under Duty Free Import Authorisation (DFIA) scheme is withdrawn with immediate effect," Directorate General of Foreign Trade said in a notification.
The scheme has been withdrawn also to prevent leakages in domestic markets.
Under the scheme, refiners were allowed to import raw sugar, which had to be processed and then exported.
To help cash-starved sugar mills clear dues worth Rs 21,000 crore to farmers, the government has recently hiked import duty on sugar to 40 per cent from 25 per cent and scrapped the excise duty on ethanol made from molasses.
The decision regarding the issue was taken by the Union Cabinet on April 29.