The Indian government has banned the export of sugar till September 30 amid inflation and future supply-related concerns linked to the West Asia conflict. The announcement was made by the Directorate General of Foreign Trade late on Wednesday and applies to raw, white and refined sugar with immediate effect.
The prohibition will not apply to sugar exports to the European Union and the US under the preferential quota. According to the notification cited by Indian Express, the ban on sugar exports will also not affect to the advance authorisation scheme, government-to-government exports, and consignments that are already in the physical export pipeline.
The move came a day after the Indian government hiked import duty on gold and other precious metals as a measure to curb non-essential imports and protect foreign exchange. The decision is likely to impact traders significantly amid continued uncertainty due to the Iran war.
“The government had provided additional export quotas in February, which encouraged traders to sign export deals. It will now be a headache for traders to fulfil those export orders,” a Mumbai-based dealer with a global trade house told Reuters.
Sugar supply tightens
The decision is believed to be part of an effort to rein in local prices and ensure availability. Sugar production in the 2025-26 season (October-September) has been estimated at about 275 lakh tonnes. As per the Indian Express report, India has a total availability of 325 lakh tonnes to comfortably meet the projected domestic consumption requirement of 280 lakh tonnes. But this will leave the closing stocks of sugar at 45 lakh tonnes — the lowest since the 39.4 lakh tonnes figure recorded in 2016-17.
Sugar prices have surged in recent weeks amid concerns that lower production in India, Thailand and Europe will tighten supply. India is the second-largest producer of sugar after Brazil and previously allowed mills to export 1.59 million metric tons — betting output would exceed domestic demand. A Reuters report noted that production was now expected to lag consumption for a second consecutive year as cane yields weaken in major growing regions.
Forecasts that El Nino weather conditions could disrupt this year’s monsoon have also raised the risk that next season’s output falls below initial estimates. Possible shortfalls in fertiliser availability are also anticipated due to the West Asia crisis.
What are the export exemptions?
The export ban will remain in place until September 30. The government has prohibited the exports of raw and white sugar while permitting certain shipments to proceed. Shipments already in the export pipeline can continue under specified conditions. It clarified that consignments would be permitted if loading had already begun before publication of the notification in the Official Gazette. The official notification said exports will also be allowed where a shipping bill had been filed, and the vessel had already berthed, arrived or anchored at an Indian port. Shipments will further be cleared if sugar had been handed over to customs or a custodian prior to publication of the notification.