India plans to introduce 25 per cent tax on sugar exports to maintain local supplies.

India plans to introduce a 25 per cent tax on sugar exports to maintain local supplies, the government said on Thursday, a move that could further push up global prices of the sweetener and boost shipments from Thailand.

Sugar output in India, the world’s no. 2 producer behind Brazil, is expected to decline this year due to a drought in major growing regions, while global prices have risen to two-and-a-half year highs. Food minister Ram Vilas Paswan said the levy was aimed at curbing the country’s exports and would help keep local prices under control in the world’s top consumer of sugar.

“There is an increasing trend in the price of sugar in the international market. Traders may increase the export of sugar to make profit,” Paswan tweeted on Thursday evening. Traders and experts said the new tax could push up global sugar prices, even though India was already expected to become a net importer in the year from Oct. 1 following back-to-back drought years.

Source : indianexpress.com