Govt slaps 20% export duty on sugar to check prices

"To keep the domestic prices of sugar under check, the government has decided to impose export duty of 20 per cent on the export of raw sugar, white or refined sugar," the Finance Ministry said in a release. A decision has been notified by the Central Board of Excise and Customs (CBEC), it said.

The duty has been imposed to restrict exports following sharp rise in global prices. The duty is, however, lower than 25 per cent proposed by the Food Ministry. India, the world's second largest sugar producer after Brazil, has exported 1.6 million tonnes of sugar so far in the 2015-16 marketing year (October-September). Further exports are unlikely to take place with this decision.

With retail sugar prices soaring to around Rs 40/kg from Rs 30/kg six months ago, the government has taken various steps to contain prices including withdrawal of export-linked production subsidy and imposition of stock limits on traders.

Last week, Food Minister Ram Vilas Paswan had announced that his ministry has proposed to "levy 25 per cent custom duty on export of sugar" to keep exports under control. "Global sugar prices are rising and therefore traders may increase the export of sugar to make profit," he had said. 

Industry body Indian Sugar Mills Association (ISMA) did not offer any comments immediately.