The Crossbill News Desk
India is preparing to import sugar for the first time in almost a decade as domestic supplies tighten and prices rise ahead of the festival season, following exports permitted earlier in the 2025-26 sugarcane crushing season.
The government is now considering imports of quantities broadly similar to those allowed for export, according to reports.
It has also tightened stockholding rules for bulk consumers in an effort to increase market availability and contain rising prices.
From September 1, 2026, manufacturers of food products, sweets and soft drinks consuming more than 10 metric tonnes of sugar a month will be permitted to hold stocks equivalent to only 15 days of consumption.
The emerging shortage has been attributed to a mismatch between production and domestic consumption during the 2025-26 season, which began on October 1, 2025. Despite indications that output was insufficient to meet demand, the government permitted sugar exports, according to a Business Standard report.
The report said India allowed the export of 2 million tonnes of sugar in November 2025. Although the sugarcane crushing season showed signs of slowing between February and March, an additional 0.8 million tonnes was exported before the government eventually halted further shipments.
The earlier assessment of the country's sugar availability has now come under scrutiny. Business Standard, citing an industry executive, reported that “someone somewhere was misleading the system into believing that the sugar fundamentals in the country were strong, while in reality production was not making up for consumption”.
The resulting decline in domestic availability has contributed to a sharp rise in prices. Sugar prices in March were estimated at around Rs 3,650 per quintal, ex-sugar mill in Maharashtra, according to the report. Current domestic selling prices have since risen to between Rs 5,400 and Rs 5,560 per quintal.
The government is now considering limited, duty-free imports to ease supplies. According to Reuters, the import duty on the permitted quantity of sugar has been reduced from 100% to zero.
Ashok Jain, president of the Bombay Sugar Merchants Association, told Reuters that with domestic availability under pressure, “only imports can help increase supplies and bring down prices during the festival season”.
The proposed imports could also create substantial margins for traders. The current cost of producing sugar domestically is estimated at Rs 4,200-Rs 4,300 per quintal, while the landed cost of imported sugar at zero duty could be around Rs 3,840 per quintal. With domestic prices ranging from Rs 5,400 to Rs 5,560 per quintal, the difference could amount to between Rs 1,560 and Rs 1,720 per quintal before additional costs.
Even after accounting for an estimated additional expense of Rs 500 per quintal, an industry expert told Business Standard that the margins could remain a “considerable positive”, potentially leaving importers with gains of roughly Rs 1,000 per quintal.
The prospect of India importing sugar after years of being a major exporter underscores the extent of the reversal in the domestic market.
The government’s decision to allow exports during a period when production was failing to keep pace with consumption is now being followed by duty-free imports and stock restrictions, as authorities attempt to rebuild supplies and prevent prices from rising further during the high-demand festival months.
The government is now considering imports of quantities broadly similar to those allowed for export, according to reports.
It has also tightened stockholding rules for bulk consumers in an effort to increase market availability and contain rising prices.
From September 1, 2026, manufacturers of food products, sweets and soft drinks consuming more than 10 metric tonnes of sugar a month will be permitted to hold stocks equivalent to only 15 days of consumption.
The emerging shortage has been attributed to a mismatch between production and domestic consumption during the 2025-26 season, which began on October 1, 2025. Despite indications that output was insufficient to meet demand, the government permitted sugar exports, according to a Business Standard report.
The report said India allowed the export of 2 million tonnes of sugar in November 2025. Although the sugarcane crushing season showed signs of slowing between February and March, an additional 0.8 million tonnes was exported before the government eventually halted further shipments.
The earlier assessment of the country's sugar availability has now come under scrutiny. Business Standard, citing an industry executive, reported that “someone somewhere was misleading the system into believing that the sugar fundamentals in the country were strong, while in reality production was not making up for consumption”.
The resulting decline in domestic availability has contributed to a sharp rise in prices. Sugar prices in March were estimated at around Rs 3,650 per quintal, ex-sugar mill in Maharashtra, according to the report. Current domestic selling prices have since risen to between Rs 5,400 and Rs 5,560 per quintal.
The government is now considering limited, duty-free imports to ease supplies. According to Reuters, the import duty on the permitted quantity of sugar has been reduced from 100% to zero.
Ashok Jain, president of the Bombay Sugar Merchants Association, told Reuters that with domestic availability under pressure, “only imports can help increase supplies and bring down prices during the festival season”.
The proposed imports could also create substantial margins for traders. The current cost of producing sugar domestically is estimated at Rs 4,200-Rs 4,300 per quintal, while the landed cost of imported sugar at zero duty could be around Rs 3,840 per quintal. With domestic prices ranging from Rs 5,400 to Rs 5,560 per quintal, the difference could amount to between Rs 1,560 and Rs 1,720 per quintal before additional costs.
Even after accounting for an estimated additional expense of Rs 500 per quintal, an industry expert told Business Standard that the margins could remain a “considerable positive”, potentially leaving importers with gains of roughly Rs 1,000 per quintal.
The prospect of India importing sugar after years of being a major exporter underscores the extent of the reversal in the domestic market.
The government’s decision to allow exports during a period when production was failing to keep pace with consumption is now being followed by duty-free imports and stock restrictions, as authorities attempt to rebuild supplies and prevent prices from rising further during the high-demand festival months.
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