Daijiworld Media Network – New Delhi

New Delhi, Aug 21: The Centre has permitted duty-free imports of one million metric tonnes of raw sugar until October 31 as it seeks to increase domestic supplies and contain rising prices ahead of the upcoming festive season.

The decision comes amid a sharp rise in sugar prices due to tightening domestic supplies. Prices have increased by around 10% over the past month and nearly 40% in the last two months, reaching record levels, according to the latest available data.

India, the world's largest sugar consumer, is turning to imports for the first time in nearly a decade as lower sugarcane production has created concerns over domestic availability.

The government has set October 31 as the deadline for duty-free imports, allowing additional supplies to reach the domestic market before demand peaks during the festive period.

Sugar consumption generally rises between August and November as festivals such as Ganesh Chaturthi, Dussehra and Diwali increase demand for sweets and confectionery. Manufacturers of biscuits and other food products also tend to build stocks ahead of the festive season.

In addition to allowing imports, the government has introduced restrictions on the amount of sugar that can be stored by bulk consumers.

Under an order issued on Wednesday, consumers using more than 10 metric tonnes of sugar per month will not be permitted to hold stocks for more than 15 days between September 1 and November 30.

The move follows a decision last month directing sugar dealers to restrict their inventories to 30 days' supply.

The measures are aimed at preventing excessive stockpiling and ensuring that sugar supplies remain available in the market during the period of increased demand.

Unfavourable weather conditions have also contributed to the supply concerns. Uneven rainfall and dry conditions have affected sugarcane crops, which require significant quantities of water for cultivation.

With production under pressure and demand expected to increase, domestic sugar prices are likely to remain elevated over the coming months.

India's return to the international sugar market as a major buyer could also have an impact on global prices. Increased Indian purchases are expected to support benchmark sugar prices in London and New York as traders factor in additional demand from one of the world's largest sugar-consuming markets.

With festive demand approaching, the government is relying on both additional imports and tighter inventory controls to improve domestic availability and contain the surge in sugar prices.