Duty-Free Import of Raw Sugar Under TRQ and Conversion of Advance Authorisations: Detailed Analysis of DGFT Notification No. 31/2026-2027-DGFT
Background and Legal Basis
The Central Government has revised the import framework for raw sugar by issuing Notification No. 31/2026-2027-DGFT dated 20/08/2026. This measure has been taken under the powers granted by Section 3 of FT (D&R) Act, 1992, read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2023, as periodically amended.
The change specifically targets imports of “Raw Sugar” covered under Exim Code 170114 of Chapter 17 of ITC (HS), 2022 – Schedule-1 (Import Policy). While the basic policy label continues as “Free”, a new set of quantitative and procedural constraints has been introduced in the form of a Tariff Rate Quota (TRQ) for duty-free imports and a limited-time restructuring option for existing Advance Authorisations under SION E52.
Core Policy Change: TRQ for Duty-Free Raw Sugar Imports
Revised Import Policy for Exim Code 170114
Under the revised framework, the import of raw sugar (Exim Code 170114) remains classified as “Free”, but now operates subject to a TRQ limit of 10 lakh MT for duty-free imports, valid up to 31.10.2026.
In practical terms:
- The product:
- Item: Raw Sugar
- Exim Code: 170114
- Chapter: 17 of ITC (HS), 2022
- The policy status:
- Free, but subject to a Tariff Rate Quota (TRQ)
- The quantitative ceiling:
- 10 lakh MT
- Duty implication:
- Imports within the TRQ quantity are duty-free
- Time limit:
- Applicable till 31.10.2026
Note: The notification does not alter the classification or nomenclature of raw sugar under ITC (HS), 2022. It only superimposes a TRQ-based mechanism for duty-free imports.
One-Time Conversion Option: Advance Authorisation to TRQ Scheme
Coverage: Advance Authorisations under SION E52
An important feature of the notification is a one-time conversion facility granted to existing Advance Authorisations issued under SION E52. This facility is designed to realign earlier import obligations with the new TRQ-based structure for raw sugar.
The conversion option applies to:
- Only those Advance Authorisations that have:
- Already been issued under SION E52, and
- Been used to actually import raw sugar up to the date of the Notification (20/08/2026).
Scope of Conversion
The conversion eligibility is broad and covers not only the raw sugar imported but also the refined product derived from it. Specifically:
- It extends to the quantity of raw sugar actually imported under the relevant Advance Authorisations up to the notification date; and
- It includes:
- Refined sugar already manufactured from such imported raw sugar, and
- Refined sugar that will be produced in future from the balance of imported raw sugar available under the same Advance Authorisation.
In essence, the entire chain – from imported raw sugar to final refined sugar derived from it – may be brought under the TRQ umbrella, subject to compliance with the stipulated conditions.
Mandatory Conditions for Conversion to TRQ Scheme
The ability to convert from the Advance Authorisation Scheme to the TRQ Scheme is not automatic. It is conditioned upon compliance with several financial and operational requirements.