Government's Major Move on Rising Sugar Prices: Duty-Free Import of 1 Million Tonnes of Raw Sugar Allowed
The Government of India has permitted the duty-free import of 1 million metric tonnes (10 lakh tonnes) of raw sugar until October 31, 2026. This authorization has been granted by the DGFT under the Tariff Rate Quota (TRQ) mechanism to boost domestic supply and control prices. The move addresses rising demand during the festive season, as wholesale and retail sugar prices have seen a significant increase. The government has also imposed stock limits—restricted to 15 days of consumption—for large bulk consumers, effective from September 1, 2024, to November 30, 2026.
The Government of India has permitted the duty-free import of 1 million metric tonnes (10 lakh tonnes) of raw sugar until October 31, 2026. The primary objective is to increase sugar availability in the domestic market and curb rising prices.
Tariff Rate Quota (TRQ) Mechanism:
The Directorate General of Foreign Trade (DGFT) has authorized this import by amending the import policy under the Tariff Rate Quota (TRQ) mechanism. TRQ is a system where imports up to a specified quantity attract low or zero customs duty, whereas imports exceeding that limit may be subject to standard or higher duty rates.
Rise in Sugar Prices:
Sugar prices in the domestic market have risen significantly. At the wholesale level, the all-India average price has increased from approximately ₹3,900 per quintal to ₹5,400–₹5,500 per quintal. At the retail level, the average price has risen from around ₹46.34 per kilogram to ₹52.30 per kilogram.
Festive Demand and Supply Management:
In India, the demand for sugar typically rises between August and November due to major festivals such as Ganesh Chaturthi, Dussehra, and Diwali. Rising demand from the confectionery, food processing, and beverage industries could exert pressure on prices. The duty-free import measure aims to ensure adequate market supply during this period of seasonal demand.
Stock limits for bulk consumers:
The government has prescribed stock limits for bulk consumers who utilize more than 10 metric tonnes of sugar per month. Such consumers will not be permitted to hold stocks exceeding 15 days' worth of consumption. This arrangement will remain in effect from September 1 to November 30, 2026.
Significance for the UPSC examination:
This news is relevant in the context of inflation control, food price management, import policy, customs duties, the DGFT, and Tariff Rate Quota (TRQ). For UPSC purposes, it is particularly important to understand how the government attempts to control prices and inflation by boosting the supply of essential commodities through measures such as import duty reductions or exemptions, TRQs, and stock limits.
