Big decision on sugar import: Government gave relief before the festive season, know what will be the impact on the general public

Just ahead of the upcoming festival season—which includes major festivals like Ganesh Chaturthi, Dussehra and Diwali—the central government has taken a big and strategic step to keep retail sugar prices under control in the country. The Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry has given green signal to the duty-free import of 10 lakh metric tons (1 Million Tonnes) of raw sugar.

Why did the need to import arise?

The following reasons are mainly responsible for the need for import of sugar in the domestic market:

• Reduction in sugarcane production and stocks: Due to the uncertainty of monsoon this year and the possibility of sugarcane production being affected in the upcoming sugar season (2025-26), the opening stock with sugar mills is estimated to be low.

• Diversion in Ethanol Manufacturing: A large portion of the sugarcane juice and syrup has been diverted to the production of ethanol blended with petrol, resulting in a slight decline in the total production of pure sugar.

• Pressure of festival demand: The demand for sweets and processed foods is at its peak across the country during the festive season between August and November. Due to fear of possible shortage of sugar in the market, wholesale prices started increasing.

The journey from export to import: Where did the mistake happen?

India has traditionally earned foreign exchange by exporting sugar to countries like UAE, Bangladesh, Sri Lanka and Afghanistan. However, the current situation has not changed overnight:

• Error in estimation: At the beginning of the session, the government had allowed export of more than 8 lakh tonnes of sugar. But as soon as there were signs of decline in domestic stocks, the government completely banned the export of sugar in the month of May.

• Strict crackdown on hoarding: To prevent artificial shortage or black marketing in the market, the government has reduced the stock holding limit of sugar for large industrial buyers (like cold drinks and confectionery manufacturing companies) from 30 days to only 15 days.

What will be the impact on the general public and the market?

The main objective of completely removing 100% custom duty on raw materials is that the raw sugar coming from abroad can easily reach India and after being refined in local mills, it can be available in the domestic market at affordable prices. This step of the government has been taken to keep the prices of sugar stable in the retail market, so that common consumers do not have to face the brunt of inflation during the festival season.