Take sugar in a blender, add in chopped vanilla bean, cut it using a scissors. Powder it finely.
Now take water in a sauce pan, add in the powdered stuff and mix well.
Bring it to a boil and simmer for 5 mins or so.
Now remove it from flame and let it cool a bit, Take it in a blender and blend it to a fine puree.
Cool this till it is completely cooked.
Pour this in a bottle and store it in fridge.
Notes
1)You can store this in fridge for more than 2 to 3months.
2)You need just ½ tsp of this stuff in your baking, because this is really strong and fragrant.