Food minister Ram Vilas Paswan has said the government will raise the import duty on sugar to 40 per cent from 15 per cent and will consider other incentives for mill owners if they clear dues owed to farmers.
"We have reached a consensus to raise the import duty to 40 per cent and to consider other incentives provided mills clear Rs 110 billion ($1.84 billion) in dues to farmers," Paswan said after meeting the sugar industry officials.
The minister also told reporters the subsidy on raw sugar exports would be extended until September.
India increased the subsidy for raw sugar earlier this month to boost output and exports.
The government has also decided to raise the mandatory blending of ethanol in gasoline to 10 per cent from 5 per cent.