The Indian sugar industry has undergone a significant structural transformation in recent years, evolving from a domestic commodity supplier into a globally competitive manufacturing sector aligned with international standards for refined and processed sugar.

As we move through the current sugar season, this shift has become central to India’s agricultural trade strategy. Recent production data show that by the end of January 2026, Indian sugar mills produced 193.05 lakh metric tonne (LMT) of sugar, compared to 165.30 LMT during the same period last year. This increase, along with an improved recovery rate of 9.11 per cent, highlights stronger operational efficiency and the sector’s ability to support higher export volumes.

Strategic export frameworks and market expansion

To manage this surplus, the Ministry of Consumer Affairs, Food and Public Distribution has adopted a calibrated export policy. For the 2025–26 season, the government approved an initial export quota of 15 lakh tonne, followed by an additional 5 lakh tonnes, taking the total to 20 lakh tonne.

This approach ensures domestic availability while enabling producers to benefit from global demand. As of February 2026, exports have commenced and are gaining momentum, with refined and white sugar accounting for a significant share of shipments.

Integration with national biofuel initiative

A key pillar of the sector’s evolution is its integration with India’s ethanol blending programme. Under the National Biofuel Policy, the country has made significant progress toward its 20 per cent ethanol blending target.

This dual focus on ethanol production and value-added sugar exports allows mills to optimise capacity utilisation and diversify revenue streams. Continued policy support for by-products has further strengthened the financial viability of integrated sugar complexes while contributing to India’s energy security.

Strengthening rural economy and global competitiveness

The expansion of processed sugar exports plays a critical role in strengthening rural incomes. By accessing diversified international markets, the industry creates a more stable revenue base, which is essential for meeting Fair and Remunerative Price (FRP) commitments to over 50 million sugarcane farmers.

For the 2025–26 season, the FRP has been set at ₹355 per quintal. This record level reflects the growing economic importance of the sector.

At the same time, Indian mills are increasingly adopting sulphur-free and clean-label refining processes. This transition is enabling a shift from volatile raw sugar markets to higher-value global segments.

Conclusion

As the industry continues to modernise and align with national priorities such as biofuels and export growth, processed sugar is emerging as a key pillar of India’s agri-export strategy. This evolution strengthens the country’s trade balance while positioning India as a competitive player in global agricultural value chains.

The author is Executive Director & Unit Head - Sugar Power & Ethanol Division of Zuari Industries

Published on April 18, 2026