India eases raw sugar import rules as it cracks down on hoarding

The government has revised the rules for duty-free raw sugar imports, giving importers up to two months from the date of filing the Bill of Entry to process the raw sugar into refined sugar and sell it in India.

The change comes as domestic sugar prices have climbed sharply ahead of the festive season and the government steps up efforts to improve supplies and curb hoarding.

Under the original August 20 notification, the government allowed duty-free imports of 1 million tonnes of raw sugar under a tariff-rate quota (TRQ) until October 31, 2026. Importers were required to convert the raw sugar into white or refined sugar and sell it in the domestic market by October 31.

Also Read: Govt halves bulk sugar stock limit to 15 days as prices surge

The Directorate General of Foreign Trade (DGFT) has now replaced that fixed deadline with a two-month window from the date of filing the Bill of Entry.

The government had also allowed a one-time conversion of existing Advance Authorisations issued under SION E-52 into the TRQ scheme for raw sugar actually imported under those authorisations up to August 20. This includes refined sugar already produced, as well as sugar to be produced from the imported raw sugar.

The conversion is subject to payment of GST that was exempted at the time of import and other prescribed conditions.

Why the government is acting

Sugar prices have risen from ₹48.18 a kg on July 20 to ₹63.05 a kg on August 24, amid tighter supplies and rising demand ahead of the festive season.

The government has attributed the increase to lower-than-expected production, weather-related crop damage, global supply concerns and hoarding. It has rejected diversion of sugar towards ethanol as the main reason for the price rise.

Domestic sugar stocks are estimated at 3.5-3.9 million tonnes, below the government’s normative buffer of 6 million tonnes.

With supplies tightening before the new crushing season, the Centre’s decision to allow 1 million tonnes of duty-free imports is aimed at improving availability in the domestic market.

The government has also halved the stockholding limit for bulk sugar consumers to 15 days of consumption from September 1, in an effort to curb hoarding and speculation.

The move was accompanied by tighter monitoring of sugar mills. Mills were asked to provide transaction-level details of sales made between August 17 and 19, including quantities, prices and buyer details.

Also Read: India’s sugar industry body shares a positive price outlook

The government is stepping up scrutiny as the August-November festive period approaches, when demand for sugar typically increases.

The latest change to the import rules gives traders more flexibility on when they need to process and sell imported sugar, while keeping the government’s broader objective of bringing additional supplies into the domestic market intact.