Govt not to hike import duty on sugar

Rejecting the demand to hike import duty on sugar to 40%, the Finance Ministry today said the levy will be retained at the existing level of 15%.

"Requests have been received from the various stakeholders for increase in import duty on sugar. Upon consideration of all relevant aspects, the government has decided not to disturb the import duty structure on sugar for the present," Minister of State for Finance Nirmala Sitharaman said in a written reply to the Lok Sabha.

The announcement to maintain status quo comes within a month of a high-level meeting held by Food Minister Ram Vilas Paswan in which there was a consensus on raising import duty on sugar to 40%, from 15%.

The duty was last raised in August last year from 10%.

Currently raw and refined sugar attract import duty of 15%, while Khandsari sugar attracts 60% duty.

Till June, sugar arrears stood at Rs 11,524 crore.

Earlier this year, the government had announced interest -free loan worth Rs 6,600 crore to sugar mills to pay dues to growers.

The sugar industry has been facing a cash crunch due to higher cost of production and lower selling prices in the wake of surplus output over the past few years.

The country's sugar production is expected to 24.3 million tonnes in 2013-14, as against 25.1 million tonnes in the last year.