India has approved the duty-free import of 1 million metric tonnes of raw sugar as the government moves to ease a sharp increase in domestic sugar prices and strengthen supplies ahead of the peak festive season.
The Commerce Ministry’s decision, announced on August 20, allows the imports until October 31, 2026. The move comes after domestic sugar prices rose sharply over the past two months, with prices increasing by nearly 40%, according to Reuters.
The imports are intended to improve availability in the domestic market at a time when sugar consumption typically increases during the festival period. India is entering a high-demand season covering major festivals including Ganesh Chaturthi, Dussehra and Diwali.
The decision marks a significant policy shift for the world’s largest sugar consumer. India has not needed to rely on overseas sugar supplies on this scale for nearly a decade, making the move particularly significant for both domestic and international markets.
Domestic sugar prices have climbed amid concerns over production and supply. Poor weather conditions affecting sugarcane cultivation, combined with strong seasonal demand, have contributed to the recent price surge. Wholesale sugar prices in major markets have also reached record levels.
The government has simultaneously introduced tighter stockholding restrictions for bulk sugar consumers. From September 1 to November 30, bulk users consuming more than 10 tonnes a month will be restricted to holding stocks equivalent to no more than 15 days of consumption. The measure is intended to discourage excessive inventory accumulation and help improve market availability.
The import decision could also have implications for the global sugar market. With India returning as a significant buyer after several years, increased import demand is expected to provide support to international benchmark sugar prices in markets such as London and New York.
Industry representatives, however, have argued that India does not face an outright shortage of sugar. The Indian Sugar & Bio-energy Manufacturers Association (ISMA) said domestic stocks with mills are sufficient to meet consumption until supplies from the new sugar season begin arriving. It described the government’s intervention as a signal against speculative and unwarranted price increases.
The government’s latest action therefore combines duty-free imports and tighter stock controls to contain prices and ensure adequate supplies during the crucial festive consumption period.
For global sugar traders, India’s return to the import market could become an important demand-side development, while for Indian consumers and food businesses, the additional supplies are expected to help moderate domestic prices in the coming weeks.