India Imposes Sugar Export Ban Until September 2026 to Curb Rising Domestic Prices

KATHMANDU — India has imposed an immediate ban on sugar exports until September 30, 2026, in a move aimed at controlling rising domestic prices and ensuring adequate local supply, according to Indian media reports and official notifications.

According to a notification issued by India’s government, exports of raw, white and refined sugar have been shifted from the “restricted” category to “prohibited”, making the ban effective immediately or until further orders. The decision is expected to tighten global sugar supply and potentially push international sugar prices higher.

Previously, India had permitted sugar mills to export around 1.59 million metric tonnes of sugar during the current season, anticipating domestic production would exceed demand. However, weakening sugarcane output and growing uncertainty over supply conditions forced New Delhi to reverse its policy stance.

India, the world’s second-largest sugar producer after Brazil and among the largest sugar exporters globally, has witnessed a sharp decline in sugarcane production in key growing regions such as Maharashtra and Karnataka, raising concerns over domestic availability for a second consecutive year. Production is now projected to fall below domestic consumption levels again, tightening inventories across the country.

Concerns have also intensified over the potential impact of El Niño weather conditions and monsoon uncertainty, which could further weaken sugarcane production in the upcoming season. Indian authorities are increasingly focused on securing domestic food supplies as inflationary risks remain elevated.

The export restriction is also linked to India’s broader ethanol blending policy, under which the government aims to mix 20 percent ethanol in petrol to reduce dependence on imported crude oil. As part of this strategy, sugar mills have expanded ethanol production capacity, diverting a larger share of sugarcane toward biofuel production instead of sugar manufacturing. Analysts had previously warned that the growing shift of cane toward ethanol could tighten sugar supplies for both domestic consumption and exports.

Despite the sweeping restriction, India has allowed certain exemptions. Sugar shipments already in the export pipeline — including consignments already loaded, customs-cleared, or processed before the notification — will still be permitted under specified conditions. Exports to the United States and European Union under existing quota arrangements have also been exempted from the ban.

The move is expected to create opportunities for competing sugar exporters such as Brazil and Thailand, particularly in growing markets across Asia and Africa, where India has historically maintained a strong export presence. Reuters reported that global sugar markets reacted immediately, with both raw and white sugar futures rising after India’s announcement.

For Nepal, which relies significantly on imported food commodities from India, the policy shift may add pressure on sugar supply and pricing in the domestic market, particularly ahead of festive demand if alternative sourcing remains limited.