The current duty relief will partially restore parity and enable EOUs to access the domestic market when the going gets tough in the international market. The relief provided by the finance ministry, however, is partial for EOUs as they still have to pay stiff duty on yarn. The reduction in duty is only in the case of fabrics. Textile EOUs still face a duty disadvantage of 4.1% in the case of cotton yarn and large volume of business is shifting to domestic units. In any case the move will benefit a large number of EOUs, which account for nearly 50% of the shipments from the country.

Several foreign sugar majors are currently ‘surveying’ the Indian market, following the gradual decontrol of the industry. Many foreign companies have in fact already entered the food business, especially high-volume areas like edible oil and wheat flour. Since FDI is not permitted in the retail segment, the overseas players operate through the franchisee route.

The government's decision to relax the quota system for free sales, has already influenced the fortunes of domestic sugar companies. Further with domestic players also staking their claim to a share in the Indian sugar-pie, entry of foreign players is likely to lead to increased competition, resulting in better choices for Indian customers.