India has approved duty-free imports of 1 million metric tonnes of raw sugar as the government moves to ease a sharp rise in domestic prices and improve supplies ahead of the festive season.
A Commerce Ministry notice allows the imports until October 31, covering the period before India enters its peak festival season, as per Reuters reports. Sugar consumption typically rises during this period as demand for sweets, cakes and other products increases.
The move comes after domestic sugar prices climbed nearly 40% in two months, driven by tighter supplies and lower production. The price surge has increased pressure on consumers and prompted India, the world's largest sugar consumer, to turn to imports after nearly a decade.
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The government's decision is aimed at bringing additional supplies into the domestic market before festival demand intensifies. The timing is particularly important for food manufacturers and households that typically increase sugar purchases during the August-November period.
India's return to the import market could also have implications beyond its domestic sugar industry. Analysts expect increased Indian buying to provide support to benchmark sugar prices in London and New York, as the country's large import requirement adds to international demand.
The decision marks a significant shift for India, which has generally relied on domestic production to meet its large consumption needs. The current supply squeeze, however, has changed the balance and increased the need for overseas supplies.
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