Sugar Price Hike: Govt Allows Duty-Free Import of 10 Lakh Tonnes, Imposes Stock Limits

The government on Thursday allowed duty-free imports of 10 lakh tonnes of raw sugar under a tariff rate quota till October 31 amid rising prices of the sweetener in local markets. The move is aimed at enhancing domestic availability and capping price rise, with the government also imposing a stockholding limit on bulk consumers who use more than 10 tonnes of sugar a month, capping their stock at 15 days' consumption.

Duty-Free Import Policy Announced

"The import policy for raw sugar is amended to allow 10 lakh MT of duty-free imports under Tariff Rate Quota (TRQ) till October 31, 2026," the Directorate General of Foreign Trade said in a notification. The order comes against the backdrop of a sharp rise in sugar prices, with ex-mill rates hitting record levels due to a lower opening stock ahead of the 2026-27 season. Sugar Price Hike: Is Ethanol Diversion Driving a 20% Surge in Retail Prices in Just 12 Days?

Sugar Prices Climb Sharply

The all-India average ex-mill price rose to INR 5,400-5,500 per quintal on Tuesday, up from INR 3,900 a year earlier, according to an industry body. Retail sugar prices have climbed about 13 per cent year-on-year to INR 52.30 per kg as on August 18, from INR 46.34 a year ago, as per consumer affairs ministry data. Demand for sugar typically rises between August and November, as the country celebrates major festivals such as Ganesh Chaturthi, Dussehra and Diwali. Sugar Shortage in India? Balrampur Chini Mills Says Current Stock Sufficient Until November.

Stockholding Limit on Bulk Consumers

Food Minister Pralhad Joshi, in a social media post, announced that bulk consumers using more than 10 tonnes of sugar a month will not be allowed to hold stock beyond what they will consume in 15 days. The food ministry has notified the Sugar (Stockholding Limit of Bulk Consumers) Order, 2026, which covers confectioners, soft drink manufacturers, food processing units, sweetmeat sellers and other institutional buyers.

"The proactive step taken by the government will immediately dispel speculation & ensure adequate supply to consumers at reasonable and stable prices over the coming year," the food ministry said in a post on X. The order will come into force from September 1 and remain in effect till November 30, following an earlier order effective August 1 to November 30, which capped stock with sugar dealers at 4,000 quintals for 30 days.

A bulk consumer has been defined as a confectioner, soft drink manufacturer, food processing unit, sweetmeat seller or any other institutional buyer with an average monthly consumption of not less than 10 tonnes over the last one year, excluding the current month.

Concerns Over 2026-27 Season Supply

The tighter stockholding norm comes amid concerns over sugar availability for the 2026-27 season, which begins on October 1. Industry estimates put opening stocks for the new season at 40-42 lakh tonnes, while some researchers peg the figure lower, at 32-35 lakh tonnes, both below the estimated domestic requirement of around 50 lakh tonnes.

TRQ Application Process

The DGFT also issued modalities for the application and distribution of the TRQ for import of 10 lakh MT of raw sugar, along with a one-time conversion from the Advance Authorisation (AA) Scheme to the TRQ Scheme. "Applications for TRQ are invited online from millers and refiners possessing their own functional capacity to convert raw sugar into white/refined sugar. The Application window is from August 21, 2026, till August 28, 2026," it said.

Importers have to submit a self-declaration of refining capacity in their application, along with supporting evidence in the form of a copy of Consent to Operate issued by the State Pollution Control Board. "Preference in allocation shall be given to the importers who give an undertaking to complete such import by 15th October 2026," it said, adding that failure to utilise or surrender the allocated quantity within the prescribed period shall constitute non-compliance.

(The above story first appeared on LatestLY on Aug 21, 2026 12:41 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).