Sugar mills, that claim to have suffered "substantial loss" in the trading season ended September, Thursday urged the government to curb imports by hiking duties and provide financial aid to save the industry from "sickness and extinction".
In a joint press conference the Indian Sugar Mills Association (ISMA) and the National Federation of Cooperative Sugar Factories Limited (NFCSF) said import duties on sugar should be hiked to at least 40 percent from the current 15 percent that would make imports uneconomical and help the domestic industry.
The two associations that represent more than 90 percent of India's sugar producers, also urged the government to assist in exporting three to four million tonnes of sugar in the next eight to 10 months.
"Sugar industry has suffered substantial losses in the last season. Without the government support, it would not be possible to run the mills," said ISMA president M. Srinivaasan.
He said the government should re-introduce the interest subvention scheme to ensure easy and adequate supply of finances to the companies.
Under the scheme banks would extend loans to sugar mills against the excise duty paid and payable for the last two seasons. The interest should be repaid in four years, including two years moratorium, for which the central government can bear the interest up to 12 percent per annum for these four years.
NFCSF director general M.G. Joshi said without the government support sugar mills would not be able to start sugarcane crushing on time in the current season that started this month.
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He said the government support was needed to save the industry from "sickness and extinction".
Sugar mills owe nearly Rs.4,000 crore to farmers. ISMA director general Abinash Verma said the mills were not in a position to pay to the farmers as a majority of them have suffered substantial losses.
Verma said high cost of production and low selling prices have made Indian sugar industry totally uncompetitive in the international market.
"A direct comparison between India and Brazil, the two largest sugar producing nations in the world, gives a clear idea that the Indian sugar industry pays almost twice the sugarcane price to produce a kilo of sugar," he said.
"Brazil being the largest sugar exporter in the world, determines the global price and with their low cane price, Indian sugar becomes uncompetitive," Verma added.