In a strategic move aimed at stabilizing the domestic market, the Indian government has announced a ban on sugar exports, effective immediately and lasting until September 30, 2026. This decision comes at a pivotal moment as global sugar prices have begun to rise, making Indian sugar exports increasingly appealing to international traders and raising concerns over domestic supply.
For the 2025-26 sugar season (October-September), the government had previously approved an export quota of 1.59 million tonnes (mt). By the end of March, official data indicated that around 0.53 mt had been exported. However, industry insiders estimate that actual shipments could be as high as 0.75 mt, with total contracts—counting those already shipped—reaching 1 mt. The government anticipates that the ban will help retain approximately 0.2 mt of sugar that might otherwise have been exported, thereby strengthening local reserves.
The Directorate General of Foreign Trade (DGFT) issued a notification on May 13 detailing that although the ban is effective immediately, it is set to expire at the end of September unless further measures are warranted. Certain exemptions have been introduced to honor international trade obligations and support specific refinery operations. The ban will not affect sugar exports to the European Union and the USA under the CXL and TRQ quotas. Additionally, the Advance Authorization Scheme (AAS), which allows refineries to import raw sugar at zero duty for re-export as refined sugar, will continue to facilitate the processing industry.
To avoid logistical issues at ports, the DGFT has put in place transitional provisions. Shipments will be allowed if sugar loading onto vessels began before the May 13 notification. Furthermore, consignments will be cleared if a Shipping Bill has been filed and the vessel has already berthed or anchored at an Indian port with an assigned rotation number. Consignments that were handed over to Customs and logged in their electronic systems prior to the cutoff will also be honored, provided verifiable evidence exists.
This policy shift occurs against a backdrop of tightening supply and demand dynamics within the domestic market. Current estimates for India’s net sugar production for the 2025-26 season stand at 28 mt, a rise from the previous season’s 26.1 mt. However, this figure exactly matches the country’s annual consumption and is significantly lower than the industry’s initial expectation of over 30 mt. Closing stocks are projected to reach a record low of 3.5-3.8 mt, equating to about 1.5 months of domestic demand, prompting the government to prioritize price stability and food security.
The Indian Sugar and Bio-energy Manufacturers Association (ISMA) commented that while it had anticipated a measured review of the export situation, the immediate nature of the current restrictions may pose practical challenges in fulfilling existing export commitments with overseas buyers.
Published on May 14, 2026.
