Rajesh Rai | Phuentsholing

Without any clear indication whether India’s restriction on export of sugar is applicable to Bhutan or not, industries that require sugar as a key raw material in the country are in dilemma.

India’s Directorate General of Foreign Trade issued a notification on May 24 that export of sugar will be restricted from June 1 until October 31 this year.

It stated that from October 31, 2022, or until further orders, whichever is earlier, export of sugar will be allowed only with specific permission from Directorate of Sugar, Department of Food and Public Distribution (DFPD), Ministry of Consumer Affairs, Food and Public Distribution.”

Sugar includes raw sugar, refined sugar and white sugar.

There are about nine beverages, breweries, and food and agro establishments in the country that use sugar as the primary raw materials.

The industries require more than 800 metric tonnes (MT) of sugar in a month.

Officials working in the industries are worried that if India’s restriction is applicable to Bhutan, they will have no other option than to shut their shops until the export is allowed.

The industries also have about 1,200 employees.

The chief executive officer of a beverage company, Big Cola, in Samtse, Jamyang Choda, said the notification about the restriction is not clear.

“And we are yet to hear from the government,” he said. “But if it applies to us, we don’t have business. Factory is as good as it is closed.”

Similarly, an official with the Tashi Beverages in Phuentsholing said sugar is one of the primary raw materials and the operations will shut down if the import stops.

“We require about 150 metric tonnes (MT) of sugar in a month. This is the minimum,” he said, adding that stocking up will also block the capital.

“We also need space to stock,” he said.

An official with Drangchu Beverages in Phuentsholing said they are waiting for the government to indicate something as the notification is not clear.

“Going by the notification, it looks like we will have consideration,” he said.

As nothing is clear at the moment, Drangchhu is looking for ways to import before the restriction comes into effect on June 1.

Drangchhu requires about 120MT to 180MT of sugar in a month depending on the seasons.

According to the Indian media outlets, India is taking up this move in order to maintain domestic availability and price stability of sugar.

“The restriction is not applicable to sugar being exported to the EU and USA,” the notification added.

Meanwhile, a shopkeeper in Thimphu, Sonam Tshering said that India may consider Bhutan.

“Although there is nothing from the government yet, I think India will allow export for us,” he said.

Sonam Tshering said that many people came to buy sugar in his shop.

He said he has also ordered for more sugar stock as a measure.

In Phuentsholing, a shopkeeper, Sonam, said wholesale dealers in the eastern dzongkhags called and ordered sugar.

“We have also ordered more stock as a measure,” he said.

However, there was no panic buying in Phuentsholing.

Economic affairs minister Loknath Sharma said export restriction will affect the country.

“We don’t produce sugar and depend on India. Even small bakeries including our distilleries and fruit production will be hampered badly,” he said.

“We are optimistic that the government of India will consider our case as we wholly depend on their export,” the minister said.

Meanwhile, the Association of Bhutanese Industries (ABI) has also written to the Department of Industey of the economic affairs ministry.

According to the ABI letter, these industries are “trying their best to import and stock the material as much as possible to lessen the operational burden.”

ABI has requested the department to approach relevant ministries and initiate an urgent dialogue with the Government of India so that Bhutan can still import sugar.

Meanwhile, Indian media outlets have reported that such a step with the export of sugar is being taken for the first time in six years. “It is initiated in the wake of the Ukraine-Russia conflict that has increased food prices in many parts of the world.”

India is the second-largest sugar producer and exporter in the world after Brazil. India recently restricted the export of wheat.