Kolhapur: Twenty-seven years after the controversial “Sugar Gate” episode during the Atal Bihari Vajpayee government, Pakistan is once again eyeing India’s sugar market, this time seeking permission to export up to 1.2 million tonnes of sugar to India amid a tightening domestic supply situation and a sharp rise in prices. The Pakistan Sugar Mills Association has approached the Pakistan government seeking approval to export up to 1.2 million tonnes of surplus sugar to India. The proposal comes days after India permitted duty-free imports of one million tonnes of sugar to cool domestic prices, raising the possibility of Pakistani sugar entering the Indian market. The proposed exports are significant against the backdrop of the controversy that erupted in Parliament in August 1999, when India imported sugar to address a domestic shortage. The Congress had then alleged that a substantial portion of the imports came from Pakistan and accused the Vajpayee-led BJP government of favouring sugar mills linked to the family of then Pakistani Prime Minister Nawaz Sharif. The government rejected the allegations, but the episode became a major political controversy. The latest development has acquired added significance because India is again facing a delicate demand-supply situation in sugar. Prices have surged sharply, with retail sugar prices nearing the Rs 70-a-kg mark in several markets. The Centre’s decision to allow one million tonnes of duty-free imports is aimed at improving domestic availability and containing prices ahead of the festival season. Pakistan’s sugar industry sees an opportunity in the situation. According to the Pakistan Sugar Mills Association, Pakistan had around 2.8 million tonnes of sugar stocks as of August 15, while monthly domestic consumption is estimated at about 550,000 tonnes. Pakistan’s sugar industry has also highlighted the country’s foreign-exchange constraints. The timing of the proposal is therefore significant. India’s decision to open a window for duty-free sugar imports has created an opportunity for Pakistan’s sugar industry to dispose of its surplus stocks while earning valuable foreign exchange. For India, however, any proposal to source sugar from Pakistan is likely to carry political as well as economic implications. The memory of the 1999 “Sugar Gate” controversy remains relevant, particularly because the proposed Pakistani exports come at a time when sugar prices and domestic availability have once again become politically sensitive issues. Whether Pakistan is eventually permitted to enter the Indian sugar market remains to be seen. But the request has already revived memories of a controversy that once shook Parliament and has placed Pakistan’s surplus sugar stocks squarely in the spotlight of India’s current sugar crisis.
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