Why India has banned sugar exports till September 30

India has prohibited sugar exports till September 30 this year as the government moves to keep domestic supplies stable and prevent a rise in prices amid inflation concerns and uncertainty linked to the West Asia conflict.

In a notification issued on May 13, the Directorate General of Foreign Trade (DGFT) said the export policy for raw sugar, white sugar and refined sugar has been changed from “Restricted” to “Prohibited” with immediate effect till September 30, 2026, or until further orders.

“The export policy of Sugar (Raw Sugar, White Sugar and Refined Sugar)… is amended from ‘Restricted’ to ‘Prohibited’ with immediate effect till September 30, 2026, or until further orders, whichever is earlier,” the DGFT said.

The latest order comes despite higher sugar production during the current marketing season.

According to industry body Indian Sugar and Bio-energy Manufacturers Association, India’s sugar production rose 7.32 per cent to 27.52 million tonnes till April in the 2025-26 marketing season, mainly due to higher output in Maharashtra and Karnataka.

ISMA has projected total sugar production for the 2025-26 marketing season at 29.3 million tonnes after ethanol diversion, compared with 26.12 million tonnes in 2024-25.

For the 2025-26 sugar marketing year from October to September, the Food Ministry had initially allowed exports of 15 lakh tonnes. It later opened an additional 5,00,000-tonnes pool, of which only 87,587 tonnes were approved.

Overall, nearly 16 lakh tonnes of sugar exports were allowed, although the food ministry and sugar mills were expecting shipments of only 7.5-8 lakh tonnes during the entire marketing year.

The government has, however, exempted some categories from the latest restriction.

The DGFT notification said the order will not apply to sugar exports to the European Union and the US under the CXL and Tariff Rate Quota (TRQ) arrangements. These arrangements allow exporters to ship specified quantities at reduced or zero customs duties.

Shipments under the advance authorisation scheme, government-to-government exports and consignments already in the physical export pipeline have also been kept outside the ban.

India first imposed restrictions on sugar exports in October 2022 and extended them periodically afterwards.

The country, which is the world’s second-largest sugar producer, regulates sugar exports through quotas distributed proportionately among mills.