India has prohibited the export of sugar with immediate effect until September 30, 2026, or until further orders, according to a government notification issued on Wednesday. The ban applies to all categories of sugar including raw, white and refined sugar, marking a significant shift in policy from the previous 'restricted' status to complete prohibition. As reported by Reuters, this decision represents a tightening of overseas shipments amid domestic supply considerations as the world's second-largest sugar producer tries to cool off local prices. The move comes as India, the world's biggest sugar exporter after Brazil, had previously allowed mills to export 1.59 million metric tons of sugar, betting output would exceed domestic demand. The notification adds that shipments would be permitted if loading had commenced before May 13 or if consignments had already been handed over to customs authorities before the order took effect.
The prohibition will not apply to sugar exports to the European Union and the United States under existing tariff-rate quota and arrangements, the government clarified. According to the notification issued by the Directorate General of Foreign Trade under the Ministry of Commerce and Industry, these exemptions maintain India's established trade relationships with key international partners while implementing the domestic supply focus. The government has specified that exports will be allowed where a shipping bill had been filed and the vessel had already berthed, arrived or anchored at an Indian port, and shipments will further be cleared if sugar had been handed over to customs or a custodian prior to publication of the notification. As reported by Reuters, the move is expected to support the global white and raw sugar prices, while allowing rival producers Brazil and Thailand to boost shipments to Asian and African buyers. The order also states that "The export of sugar shall be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments."
Of the 1.59 million metric tons approved for export, traders had signed contracts for about 800,000 tons, of which more than 600,000 tons have already been shipped, dealers confirmed to Reuters. A Mumbai-based dealer with a global trade house noted that "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." The policy change has already impacted global sugar markets, with New York raw sugar futures extending gains to over 2% and London white sugar futures jumping 3% after India announced the ban. The sudden change in policy could hurt traders and sugar mills who had already signed export deals, creating uncertainty in the market.
India is expected to produce about 275 lakh tonnes of sugar in the 2025-26 season, which runs from October to September, adding around 50 lakh tonnes of opening stock to total supply of nearly 325 lakh tonnes. Meanwhile, domestic demand is likely to reach about 280 lakh tonnes, leaving closing stocks at just 45 lakh tonnes. This represents the lowest level since 2016-17, when stocks had dropped to around 39.4 lakh tonnes. The government is also worried about the next season, with production in 2026-27 potentially falling due to weaker rains caused by El Niño and concerns about fertiliser shortages linked to the Middle East crisis. Last month, the Indian Sugar & Bio-Energy Manufacturers Association projected India's gross sugar production at 32 million tonnes in the season ending September 30, revised from an earlier estimate of 32.4 million tonnes. The ban represents a shift in policy from 'restricted' to 'prohibited' status, as confirmed by the government notification, with the prohibition remaining in effect until September 30, 2026, or until further orders from the government.
