The government today announced an increase in the import duty on sugar to 25 per cent from the existing 15 per cent, in a move that could lead to spurt in retail prices of the sweetener at a time when the festival season is round the corner.
The hike in import duty that would make imports unviable, is applicable to both raw and refined sugar. The government said this has been done in public interest.
According to the notification issued by the Central Board of Excise and Customs, import duty on both raw and refined (or white) sugar has been raised to 25 per cent, which would also be applicable to bulk consumers who import raw sugar.
Food minister Ram Vilas Paswan is reported to have recommended that import duty could be raised to 40 per cent from 15 per cent if mills clear farmers' dues. However, the finance ministry has opposed the move as it could drive up inflation.
"Finance ministry has hiked the duty marginally, considering inflationary concerns and to give some relief to domestic millers," a senior food ministry official said
Sugar import duty was last raised in August last year to 15 per cent from 10 per cent.
Currently raw and refined sugar attract import duty of 15 per cent, while khandsari sugar attracts 60 per cent duty.
A rise in the duty will make imports unviable despite a plunge in global prices due to ample supplies from Brazil and Thailand.
Earlier this year, the government had announced interest -free loan worth Rs6,600 crore to sugar mills to pay dues to growers.