India has imposed a 20 percent tax on sugar exports to keep a lid on domestic prices, the government said on Thursday, a move that is likely to boost global prices of the sweetener.

Food minister Ram Vilas Paswan said this week the government plans to introduce a 25 percent tax on sugar exports to maintain local supplies.

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.

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