Commerce Ministry not looking at hiking import duty on sugar

In a development which could halt the recent rally of sugar stocks, the Commerce Ministry underscored that it was not looking at hiking import duty on sugar, as the ministry had yet not received any proposal in this regard. 

This clarification came from the Ministry right after Food minister Ram Vilas Paswan asserted the government was examining sugar industry's demand to increase the import duty to 40% from 15%, to support local prices to help mills clear dues to cane growers. He also added that petroleum ministry would also examine the issue of increasing the percentage of ethanol blending in petrol for reviving the sugar industry.

On concerns of move being compliant with regulations under World Trade Organization (WTO), the Commerce Ministry underscored that country will not be off the mark on hiking import duty as WTO will allow putting temporary curb, if it was on the premise of domestic availability of the product. Back in March, few WTO members, including Australia, asked India to remove immediately the export subsidy of Rs 3,300 a tonne on raw sugar, claiming it could distorts the global trade.

Some recent reports also suggested of government mulling a proposal for providing additional interest-free loans of Rs 4,400 crore, over the granted Rs 6,600 crore to cash-starved sugar mills to clear dues to cane farmers. The bailout package for sugar industry was discussed in the meeting attended by Transport Minister Nitin Gadkari, Women and Child Development Minister Maneka Gandhi, Agriculture Minister Radha Mohan Singh and others.

Currently, sugarcane arrears stand at about Rs 11,000 crore across the country, with the maximum of Rs 7,200 crore in Uttar Pradesh, according industry body, Indian Sugar Mills Asssociation.