India allows duty-free import of 500,000 tonnes of raw sugar

Move comes as drought curtails production below consumption levels for first time in 7 years

India, the world's biggest sugar consumer, allowed duty-free imports of 500,000 tonnes of raw sugar, a government official said on Wednesday, as a drought curtailed the country's production below consumption levels for the first time in seven years.

The duty-free imports will be allowed until June 12, said the official, who declined to be named.

The imports will harden global prices as India was an exporter of sugar until last year.

The country's sugar output in the 2016/17 year that started on Oct. 1 is likely to fall to 20.3 million tonnes, compared to annual demand of around 25 million tonnes a year ago, the Indian Sugar Mills Association (ISMA) said.