New Delhi, July 24: Nearly 4,00,000 tonnes of sugar is in the process of being exported from India to countries in the Middle East as also Sri Lanka, a senior government official said today. Mills are required to export 20 lakh tonnes of sugar in the current 2017-18 marketing year (October-September) to avail of a subsidy of Rs 55 per tonne offered by the government. "Out of 20 lakh tonnes, 4,00,000 tonnes of sugar has been moved out of the factories for the export purpose," the official, who did asked not be identified, told PTI.

Much of the shipment is being undertaken from states like Maharasthra and Karnataka which are close to ports, the official added. The government is in talks with southeast Asian countries for export of sugar, the official said.

Sugar production of India, the world's second largest producer, is estimated to touch a record 32.25 million tonnes in the current marketing year as against 20.3 million tonnes in the previous year, as per the industry data. Domestic demand is pegged at 25 million tonnes annually.

To liquidate surplus sugar and help mills clear huge cane arrears, the government has announced a slew of measures to bailout the industry.

Export duty on sugar has been scrapped and import duty on it has been doubled to 100 per cent. Moreover, a package of Rs 8,500 crore has been announced which includes a soft loan of Rs 4,500 crore to boost ethanol production.

A buffer stock of 3 million tonnes has also been created to tide over the crisis.

According to Indian Sugar Mills Association (ISMA), the country's sugar production is estimated to rise by 10 per cent to touch a new record of 35.5 million tonnes in the 2018-19 marketing year.