New Delhi, May 15: India has banned the export of sugar till September 30 this year with immediate effect, a move which would help enhance domestic availability and contain prices.
Earlier, the exports were under a restricted category, under which a license was required for the outbound shipments.
“The export policy of Sugar (Raw Sugar, White Sugar and Refined Sugar)… is amended from ‘Restricted’ to ‘Prohibited’ with immediate effect till September 30, 2026, or until further orders, whichever is earlier,” the Directorate General of Foreign Trade (DGFT) said in a notification dated May 13.
This order, however, does not apply to sugar being exported to the European Union and the US under the CXL and Tariff Rate Quota (TRQ) arrangement, respectively.
The arrangements allow exporters to ship specified quantities of sugar to these destinations at significantly reduced or zero customs duties.
The DGFT’s order is also not applicable to the shipments under the advance authorisation scheme, government-to-government exports and consignments already in the physical export pipeline.
For the 2025-26 sugar marketing year (October to September), the Food Ministry initially allowed 15 lakh tonnes in exports, then opened an additional 5,00,000-tonnes pool, of which only 87,587 tonnes were approved.
So, nearly 16 lakh tonnes of sugar export were allowed.
The food ministry and sugar mills were expecting 7.5-8 lakh tonnes of shipments in the entire 2025-26 marketing year.
India’s sugar production rose 7.32 per cent to 27.52 million tonnes till April in the 2025-26 marketing season, driven by higher output in Maharashtra and Karnataka, according to industry body ISMA.
ISMA projected total production for the 2025-26 marketing season at 29.3 million tonnes after ethanol diversion, up from 26.12 million tonnes recorded in 2024-25.
Banning exports of a commodity helps prevent a rise in prices amid inflation concerns and uncertainty caused by the West Asia conflict.
In October 2022, India imposed export restriction on sugar and then it was extended from time to time..
The world’s second-largest sugar producer keeps exports under government control through quotas distributed proportionally among mills.
Commenting on the decision, Pushan Sharma, Director, Crisil Intelligence, said the ban is a response to tightening domestic supplies.
Domestic sugar prices have risen about 4 per cent year-on-year between October 2025 and April 2026 and are expected to be overall about 5 per cent higher for sugar season 2026, he said.
Production is now estimated at 28 million metric tonnes, about 8 per cent lower compared with 30.5 MMT (million metric tonnes) expected earlier, as unseasonal showers in October 2025 triggered flowering of sugarcane and lowered recovery rates in Maharashtra and Karnataka..
With closing stocks projected at just 3.8 MMT—equivalent to 1.5 months of consumption—versus the five-year average of 2.5 months, the government’s priority is clearly to preserve domestic availability and contain prices, Sharma said.
He added that the impact on millers, however, is limited, as exports have accounted for less than 5 per cent of sales over the past two years..
Additionally, stagnant distillery volumes, slow offtake by oil marketing companies and the absence of clear blending targets will weigh on profitability, he said.
