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India, the world's biggest sugar consumer, raised import duty on the sweetener to 25% from 15%, a finance ministry source said on Friday, in an attempt to support local mills struggling to make cane payments.
The government later issued a statement confirming the duty hike.
A rise in the duty will make imports unviable for port-based refiners despite a plunge in global prices due to ample supplies from Brazil and Thailand.
In June, food minister Ram Vilas Paswan had said import duty could be raised to 40 percent from 15 percent if mills make clear farmers dues.