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Govt likely to slap 60% sugar import duty from April 1

Govt likely to slap 60% sugar import duty from April 1

Import duty on sugar was abolished in early 2009 to boost domestic supply in view of production dip in the 2008-09 sugar year (October-September), prior to which it was 60 per cent.

With India's sugar production set to exceed domestic demand, the government is likely to re-impose 60 per cent import duty on sugar from Friday.

"The duty free notification lapses on Thursday and from April 1 it automatically reverts to the old duty structure," the official source said.

Import duty on sugar was abolished in early 2009 to boost domestic supply in view of production dip in the 2008-09 sugar year (October-September). Before that, the import duty on sugar was 60 per cent. The duty-free regime was valid till Thursday.

India had imported about six million tonnes of sugar since February 2009 to meet domestic demand. Sugar production of India, the world's second largest producer, had fallen to 14.7 million tonnes in 2008-09 against the annual domestic demand of 22 million tonnes.

In 2009-10, the output improved to 19 million tonnes, but was still short of demand.

However, in the current sugar year, the production is expected to outstrip demand at 24.5 million tonnes and the country has started exporting the sweetener.

Domestic prices have also softened to Rs 30-32 per kg in the national capital from nearly Rs 50 per kg in mid-January 2010.

Recently, the government allowed export of 5,00,000 tonnes of sugar under the open general licence (OGL) scheme.

The Food Ministry is yet to notify the procedures for export.