The Centre on Thursday allowed duty-free import of raw sugar till January 1, 2011, to boost availability of the sweetener, according to information posted on the website of the Central Board of Excise and Customs.
The government had earlier allowed raw imports at zero duty till March 31, 2010.
The scrapping of duty comes amid higher estimated demand and low production, as India —the world’s largest sugar consumer and second-largest producer — faces a cane crunch.
The country is expected to produce about 16 million tonnes of sugar in the 2009-10 sugar cycle, while it will need about 23 million tonnes to meet its annual consumption.
The move will allow mills to contract on a long-term basis to meet domestic demand. Sugar prices have almost doubled to Rs 36 a kg in the last year.
A severe drought that affected almost half of India’s 626 districts this year, has not only shaved off rice output by 11 million tonnes but also worsened a sugar crisis.
Centre has also allowed millers to import refined sugar till March 31, 2010, without duty, extending it from the earlier deadline of November 30, 2009.
India produced just 15 million tonnes of sugar, way below its average demand of 23 million tonnes, in 2008-09, compared to 26.4 million tonnes it had produced in the previous season.