New Delhi has allowed the export of 25,000 tonnes of sugar on a quota basis to Nepal till September 30 next year, as Nepal is struggling to ensure enough sweetener amid the upcoming Tihar festival.

The price of sugar which was Rs75 per kg in the retail market a few weeks before the Dashain surged to Rs130 per kg after India’s export restriction.

The price has jumped to Rs160 per kg and is not easily available in the market, traders say.

However, market insiders say import may not be possible before Tihar.

India’s Ministry of Consumer Affairs, Food and Public Distribution decided to allow the export of 25,000 tonnes of sugar to Nepal on Thursday.

Under the government-to-government arrangement, Nepal should bring the sugar through India’s National Cooperative Exports Limited.

“We received an email on Thursday evening and held a meeting on Friday. We have written to the Indian government through the Ministry of Foreign Affairs to facilitate the export of 20,000 tonnes of sugar,” said Gajendra Kumar Thakur, joint secretary at the Ministry of Industry, Commerce and Supplies.

“We are making all possible efforts to import the sugar before Tihar.”

Tihar festival begins on November 11.

The festival of lights is celebrated with sweet treats. Sweet shops across the country are in short supply of sugar after Nepal’s Finance Ministry delayed the approval to import sugar to state-owned supply agencies before the Dashain festival.

According to Thakur, they have asked the Indian government to send the consignment through Birgunj customs. “We have requested medium sugar varieties,” he said.

The Directorate General of Foreign Trade of India, on October 18, issued a notice that it has extended the restriction on sugar exports beyond October 31.

However, according to the notice of India’s Ministry of Consumer Affairs, Food and Public Distribution, a committee of ministers formed to review the price and availability of essential commodities decided to allow sugar export to Nepal and Bhutan through the National Cooperative Exports Limited.

Thakur said that out of 25,000 tonnes of sugar, they plan to import 20,000 tonnes in the first phase.

The government’s supply bodies—Salt Trading Corporation and Food Management and Trading Company—will import 10,000 tonnes each, respectively.

“The remaining 5,000 tonnes will be imported once the price of sugar starts declining in India,” said Thakur.

The sugar imported for the festival will be exempted from customs duty, said the industry ministry.

The government levies taxes totalling 43 percent on sugar import—30 percent import duty and 13 percent VAT.

But, according to the officials, to provide relief to consumers, the government has halved the import duty for sugar.

According to the industry ministry, for the Tihar festival, the Salt Trading Corporation will be supplying 3,000 tonnes of sugar from different domestic sugar mills.

“We have started supplying 300 tonnes of sugar in the market from Friday,” said Thakur.

India has been halting shipments of sugar for the first time in seven years saying that lack of rain has hit sugarcane yields. India allowed mills to export only 6.1 million tonnes of sugar until September 30, after letting them sell a record 11.1 million tonnes during the last season.

According to Nepal’s Department of Commerce, Supplies and Consumer Protection, police and administration are being mobilised to distribute sugar from the mills to prevent hoarding.

The department said that the administration would confiscate sugar if found hoarded in unregistered warehouses.

“The police have been inspecting all the sugar mills,” said Ananda Raj Pokharel, information officer at the Commerce Department.

The Ministry of Industry, Commerce and Supplies had asked for permission to import 60,000 tonnes of sugar in August to meet the anticipated festival demand.

However, the Finance Ministry approved the import of 20,000 tonnes of sugar on September 13, just a month ahead of the Dashain festival.

Due to the delay in import approval and bidding process, both Salt Trading and Food Management and Trading Company were not able to bring sugar.

Subsequently, India issued a notice to sugar mills to restrict exports at the start of October, halting shipments for the first time in seven years.

India surprised buyers in July by imposing a ban on non-basmati white rice exports.

New Delhi also imposed a 40 percent duty in August on exports of onions as it tries to calm food prices ahead of state elections later this year.

Nepal’s annual sugar requirement is around 270,000 tonnes. The country faces a deficit of about 100,000 tonnes of the sweetener annually which is fulfilled through imports by the private sector and sometimes by the two government companies.