Govt turns down Al Khaleej's proposal

World's largest refined sugar producer not allowed to set up plant

The Board, which met on Friday, reportedly turned down the proposal saying the firm could not be allowed to bring foreign investment as the Commerce and Food ministries are not in favour of the proposal.

It also pointed out that since DGFT came out with a circular on April 16, withdrawing a facility of "ton-to-ton" basis of allowing duty free import of raw sugar and replacing it with "grain to grain" basis.

"The Director General of Foreign Trade (DGFT) has withdrawn the earlier facility of duty free import of raw sugar subject to exports of refined sugar within the stipulated period with same volume. Now any firm, importing duty free sugar would have to export the same volume of sugar of same category after refining it without diverting it to the domestic market," sources said.

Ton-to-ton basis of allowing duty free import of raw sugar means that advance licenses would be given for importing raw sugar on zero duty on the condition that same amount of any category of sugar would be exported within a stipulated time, while grain-to-grain means that the same category of refined sugar would be exported within a stipulated time.

FIPB is a recommendatory body and proposals cleared by it go to the Finance Minister P Chidambaram for final approval.