India is taking steps to address a significant rise in sugar prices by allowing duty-free raw sugar imports and implementing stock limits for bulk consumers, aiming to increase market supply and lower costs. Lowered production levels and the diversion of sugar for ethanol production have contributed to the current price surge and supply concerns.

India is taking steps to address a significant rise in sugar prices by allowing duty-free raw sugar imports and implementing stock limits for bulk consumers, aiming to increase market supply and lower costs. Lowered production levels and the diversion of sugar for ethanol production have contributed to the current price surge and supply concerns.

India is taking steps to address a significant rise in sugar prices by allowing duty-free raw sugar imports and implementing stock limits for bulk consumers, aiming to increase market supply and lower costs. Lowered production levels and the diversion of sugar for ethanol production have contributed to the current price surge and supply concerns.

Following a rise in sugar prices across India, the government is taking measures to curb the price surge through imports and stock limits for bulk consumers.

The Directorate of Foreign Trade on Thursday announced a temporary duty-free quota allowing the import of 10 lakh tonnes of raw sugar. India last imported raw sugar for domestic use in 2016-17 season because of back-to-back drought years that caused output to plummet by over 40 per cent.

The move on imports follows the Centre’s order to tighten sugar stockholding limits. Starting September 30, the restrictions state that no bulk consumers, which include confectioners, soft drink manufacturers, food processing industries, and sweetmeat sellers that use more than 10 tonnes of sugar a month, can keep sugar stocks for more than 15 days.

Both the measures are expected to increase the supply of sugar in the market, which will in turn reduce the prices.

India’s projected sugar opening stock for October 2026 has dropped to 32-42 lakh tonnes from 47 lakh tonnes in October 2025. This decline stems from low production of 296 lakh tonnes, the lowest level since the 2019 to 2020 season.

Wholesale sugar prices in August range from ₹6,500 to ₹6,750 per 100kg. This is nearly a 30 per cent increase from the previous month, when prices were around ₹4,850 to ₹5,100. According to Consumer Affairs Department data, the all-India average retail price was ₹52.3 per kg on August 18. Tight supply, along with festival demand, has been attributed as the reason behind the price hike.

However, the controversy around sugar imports stems from the fact that mills diverted about 30 lakh metric tons of sugar, or around 10 per cent of total output, for E20 ethanol production during the current year to the end of September.

According to the All India Distillers Association (AIDA), ethanol production capacity increased to roughly 18.22 crore litres a year across 499 sites by mid-2025. AIDA added that India aims to reduce its dependence on sugarcane for ethanol production and is now trying to increase grain-based and maize output.

Experts have raised concerns that the diversion of sugarcane to produce ethanol can cause a supply deficit. Sugar stocks have also taken the fall, crashing up to 5 per cent, despite the broader market trading flat today.