India Allows Tax-Free Sugar Import in Rare Move to Cool Prices

India, the world's second-largest sugar producer, has permitted mills and refiners to import duty-free raw sugar in a bid to lower soaring local prices. The government will permit the import of up to 1 million tons of raw sugar until October 31 without any taxes, as per a notice from the commerce ministry on Thursday. Presently, imports are subject to a 100% levy. Eligible companies must possess their own refining facilities, and applications can be submitted between August 21 and August 28, according to the ministry.

Raw sugar futures in New York jumped as much as 4.1% on Thursday, reaching their highest level since April 2025. This move aims to curb global supplies and represents a rare step by India, which last imported the sweetener for domestic use nearly a decade ago. The measure comes just before a projected surge in domestic demand during the festival season, when consumers purchase more traditional sweets and processed foods.

Ex-mill sugar prices in Maharashtra, a major Indian growing state, recently hit an all-time high. Ashwini Srivastava, a joint secretary in the food ministry, stated that the government's proactive step will quickly dispel speculation and ensure adequate supply to consumers at stable prices over the upcoming year.

Indian refiners are currently allowed to import duty-free raw sugar through advance authorizations, provided it is exported back after processing under tolling arrangements. Companies have also been permitted to divert some of this imported sweetener to the domestic market post-refining, with the entire processed quantity to be sold locally by October 31, as per the ministry.

The world's largest sugar consumer had previously tightened stockpile limits for dealers and bulk users for three months. Although India's monsoon rains, crucial for sugarcane crop development, have been below average this season, producers plan to commence crushing cane from the upcoming harvest slightly earlier than usual to further increase supplies.