In a move seen as aimed at stabilizing the domestic market, the Government on Thursday imposed an immediate ban on sugar exports, effective until September 30, 2026. The intervention comes at a critical juncture as global sugar prices show signs of a rebound, which had begun to make Indian exports increasingly attractive to international traders, potentially threatening domestic availability.

For the 2025-26 sugar season (October–September), the government had initially authorized an export quota of 1.59 million tonnes (mt). Official data indicated that roughly 0.53 mt had been shipped by the end of March. However, industry intelligence suggests a higher volume of activity, with actual shipments estimated at 0.75 mt and total contracts, including those already shipped, reaching 1 mt. By implementing the ban now, the government expects to retain approximately 0.2 mt of sugar that would have otherwise left the country, bolstering local reserves.

The notification issued by the Directorate General of Foreign Trade (DGFT) on May 13 clarifies that while the prohibition is immediate, it is scheduled to lapse at the end of September unless further extensions are deemed necessary. To maintain international trade obligations and specific refinery operations, the government has provided key exemptions. The ban will not apply to the sweetener exported to the European Union and the USA under the CXL and TRQ quotas. Furthermore, exports under the Advance Authorization Scheme (AAS), whereby refineries import raw sugar at zero duty to re-export it as refined white sugar, will continue unaffected to support the country’s processing industry.

To prevent logistical chaos at ports, the DGFT has outlined transitional arrangements. Shipments will be permitted if the loading of sugar onto vessels commenced prior to the May 13 notification. Similarly, consignments will be cleared if a Shipping Bill was filed and the vessel had already berthed or anchored at an Indian port with an allocated rotation number. Consignments handed over to Customs and registered in their electronic systems before the cutoff will also be honored, provided there is verifiable evidence.

This policy shift is rooted in a tightening domestic supply-demand balance. India’s net sugar production for the 2025-26 season is currently estimated at 28 mt. While this is an improvement over the previous season’s 26.1 mt, it matches the country’s annual consumption exactly and falls well below the industry’s initial expectation of over 30 mt. With closing stocks projected to hit an all-time low of 3.5–3.8 mt, representing only about 1.5 months of domestic demand, the government’s priority has shifted firmly toward price control and food security.

The Indian Sugar and Bio-energy Manufacturers Association (ISMA) noted that while it was anticipating a calibrated review of the export situation, the immediate nature of the current restrictions may pose practical challenges in honoring certain export commitments already contracted with overseas buyers.

Published on May 14, 2026