India banned sugar exports, effective till 30th September 2026, to address food inflation and stabilize the sugar market amid production concerns. Announcement came through a notification by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry.
According to DGFT notification, the export policy for raw sugar, white sugar, and refined sugar with the following ITC (HS) Codes has been revised from ‘Restricted’ to ‘Prohibited’.
“The export policy of Sugar (Raw Sugar, White Sugar and Refined Sugar) under ITC (HS) Codes 1701 14 90 and 1701 99 90 is amended from ‘Restricted’ to ‘Prohibited’ with immediate effect till September 30, 2026, or until further orders, whichever is earlier,” the DGFT notification said.
The restriction coincides with concerns around low sugarcane production in key producing states. The government's move intends to ease domestic prices and ensure adequate supply in the local market if production falls below consumption, Reuters said.
India is the second largest producer and exporter of sugar after Brazil. In the current season government has allowed sugar exports of approximately 1.59 million metric tonnes. Before announcing the ban, traders had already signed contracts for around 800,000 tonnes, of which over 600,000 tonnes had already been shipped.
Concerns around potential El Niño effects on monsoon have also put additional pressure on policymakers to ensure food security at home and that foreign exchange reserves are not put to strain.
Despite the ban, several exemptions have been granted to prevent disruption of strategic trade arrangements and shipments already underway.
Exports to the EU and to the US will continue under CXL and Tariff Rate Quota (TRQ) schemes. The Advance Authorization Scheme (AAS) and government-to-government shipments for food security purposes are also exempted.
The DGFT has also granted export permission to those consignments that are already on their way. They involve cargoes that had been loaded before the notification date, shipping bills had been filed, or goods had been handed over to customs authorities before the notification date.
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The export prohibition had a swift effect on the sugar market globally. New York and London sugar futures have strengthened by over 2% and 2.8%, respectively, after the announcement, according to Reuters.
“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 fulfill those export orders,” a Mumbai-based dealer with a global trade house told Reuters.