India’s sugar industry calls for export policy reform after trade ban

India’s sugar industry is urging the government to overhaul its export policy by introducing quarterly export quotas and an EU-style auction system. Industry representatives argue that such measures would help avoid sudden export bans that disrupt trade and damage India’s reputation as a reliable supplier on the global sugar market.

The proposal follows the latest sugar export ban, which disrupted contracts with key buyers including Sri Lanka, Afghanistan, and Djibouti. According to market participants, this was the seventh restriction on sugar exports since 2005. Industry leaders warn that abrupt policy changes lead to financial losses for traders and undermine confidence among international customers.

One of the proposed solutions is an auction-based allocation of export rights similar to the system previously used in the European Union. Under this model, exporters would bid for export quotas, allowing the government to regulate volumes while avoiding a complete halt to trade.

Industry executives also advocate replacing annual export allocations with quarterly quotas. This approach would allow authorities to adjust export volumes according to updated crop forecasts while providing traders with greater visibility and confidence when signing contracts. The proposal comes amid significant fluctuations in sugar production estimates and uncertainty related to El Niño weather conditions.

Beyond sugar, market participants point to similar export restrictions on rice and wheat, which have contributed to the loss of market share in several importing countries. They are calling for a more predictable trade policy and closer consultation with exporters. India’s sugar production is projected to increase by 8.2% in the 2026/27 marketing year to 30.2 million metric tons, although a substantial share of sugar will continue to be diverted to ethanol production.

Tags: export, rice, sugar, wheat, India