Sugar Price Rise: Centre Allows Duty-Free Import of 10 Lakh Tonnes of Raw Sugar Till October 31

The central government has taken a major step to curb rising sugar prices ahead of the festive season. The government has permitted the duty-free import of 10 lakh tonnes (1 million metric tonnes) of raw sugar under the Tariff Rate Quota (TRQ) until October 31, 2026.

The move comes as domestic sugar prices have surged sharply in recent months, raising concerns over supply and affordability ahead of the peak festive demand period.

India to Import Sugar After a Decade

According to a notification issued by the Ministry of Commerce, 10 lakh tonnes of raw sugar can be imported at zero duty until October 31, 2026.

This is a significant policy move as India is set to import sugar after nearly a decade. The decision has been taken at a time when domestic sugar prices have reportedly risen by around 40% over the past two months.

The government is seeking to increase the availability of sugar in the domestic market and prevent prices from rising further.

Why Has the Government Allowed Duty-Free Sugar Imports?

Sugar demand typically increases between August and November due to major festivals such as Ganesh Chaturthi, Dussehra and Diwali. Demand from households, sweet manufacturers, biscuit companies and other confectionery businesses generally rises during this period.

With domestic prices already elevated, additional imports could help improve supply and ease pressure on prices.

Government Tightens Sugar Stock Limits

The duty-free import decision comes shortly after the government tightened restrictions on sugar inventories.

Under the new stock limit, industrial or institutional consumers using more than 10 metric tonnes of sugar per month cannot hold stocks exceeding their 15-day requirement.

The restriction will come into effect from September 1 and remain in force until November 30, 2026.

The government has taken these measures to discourage excessive stockpiling and ensure that adequate sugar remains available in the market during the festive season.

What Could Be the Impact on Sugar Prices?

The additional supply from duty-free imports could help moderate domestic sugar prices if imported supplies reach the market quickly.

The move may also reduce concerns about shortages during the festive season. However, the actual impact will depend on import volumes, international sugar prices, logistics and domestic production.

For consumers, increased availability could provide some relief if wholesale and retail sugar prices begin to soften.

Sugar Stocks May Face Pressure

The government's decision could also affect sugar companies and sugar stocks. Higher domestic sugar prices had recently supported sugar-sector shares, while concerns over supply had strengthened market sentiment.

However, increased imports could reduce the possibility of further domestic price increases. This may create some pressure on sugar producers if realizations weaken.

At the same time, improved supply conditions could benefit downstream industries such as confectionery and food processing companies by reducing input-cost pressure.