India has allowed duty-free imports of raw sugar for domestic sale, a move that will raise purchases from Brazil and squeeze many domestic mills but may ease prices ahead of elections.
The widely expected decision by the world's top sugar consumer was keenly awaited by the sugar trade around the world amid expectations that the country would buy 1.0 to 1.5 million tonnes of sugar, supporting prices.
Commerce Minister Kamal Nath said on Tuesday that the government had approved the new import regime, called "tonne to tonne" by officials and traders.
This allows duty-free imports for local sale on the condition that a similar quantity of refined sugar is exported within two years.
It replaces an earlier policy, called "grain to grain", under which the importer was obliged to refine the imported consignment and export it.
"Yes, it has been allowed," Nath told reporters when asked if the change in policy had been approved.
Farm Minister Sharad Pawar said last month that domestic sugar output was expected to fall 32 percent to 18 million tonnes in the year to September, encouraging the government to consider changes in import rules
Source : REUTERS INDIA