Indian Sugar Exports Banned, Market Focus Turns to Domestic Producers

Government Tightens Export Norms for Sugar Stocks

In a move aimed at supporting global sugar prices, the Directorate General of Foreign Trade has tightened export norms for sugar stocks. A notification dated 13 May 2026 amended the export policy for sugar from "restricted" to "prohibited" with immediate effect, applicable till 30 September 2026, or until further orders.

The restriction covers raw, white, and refined sugar under specified ITC (HS) codes. India, the second-largest exporter of sugar globally, after Brazil, had previously permitted the export of 1.59 million metric tonnes, anticipating excess production. However, the output is now estimated to be insufficient to meet domestic consumption for the second consecutive year, attributed to lower cane yields in significant areas.

India's sugar production is projected at 27.5 million tonnes. Of the 1.5 million tonnes of exports permitted, approximately 700,000 tonnes have already been shipped. This move is expected to support global sugar prices while enabling competing exporters, such as Brazil and Thailand, to increase shipments to key markets in Asia and Africa.

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Exemptions to the Order

Sugar shipments to the European Union and the United States will still be permitted under the tariff rate quota agreements, as long as they comply with the designated public notice procedures. Shipments authorised under the Advance Authorisation Scheme continue to be exempt from this restriction as well. Additionally, the ban does not affect shipments that are already in the export process or in transit before the notification was made, including those that have been submitted to customs along with electronic documentation.

Comparison of Sugar Exports

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If the prohibition is not extended past the 30 September deadline, the policy will default to its "restricted" status. Worries regarding a potential El Niño effect on the monsoon have intensified concerns about the production forecast for the upcoming season.