India is considering limited duty-free sugar imports and other supply-side measures to bring down record domestic sugar prices ahead of the peak festive season, according to government and industry sources. The move could mark India’s first significant overseas sugar purchases in nearly a decade.
Wholesale sugar prices in Kolhapur, Maharashtra, a major trading hub, have climbed nearly 20% since the beginning of August, reaching a record ₹5,350 per 100 kg. The sharp increase has come despite government assessments that overall supplies are sufficient to meet domestic demand until the next sugar season.
The government is examining several options, including reducing import duties, permitting limited duty-free imports, lowering stockholding limits for bulk traders and adjusting monthly sales quotas for sugar mills. The measures are aimed at increasing market availability and preventing further price escalation during the August-November festival period.
One proposal under consideration could allow sugar mills to import up to 1 million metric tonnes of sugar duty-free by the end of October. Traders expect mills to focus mainly on raw sugar, as high international prices for refined sugar could make white-sugar imports less commercially attractive.
The government is also considering directing India’s port-based sugar refineries to release some stocks into the domestic market. Such facilities could potentially divert around 300,000 tonnes of refined sugar to local consumers, according to industry sources.
India’s sugar demand typically rises sharply between August and November as consumption increases during Ganesh Chaturthi, Dussehra and Diwali. The seasonal demand surge has intensified concerns over available stocks and prompted authorities to explore additional supplies.
The government is also considering reducing the quantity of sugarcane diverted toward ethanol production in the upcoming season, which could increase the amount of cane available for sugar production.
For global sugar markets, any significant Indian import programme could provide additional support to international benchmark prices while helping New Delhi contain domestic inflation. However, the proposed measures are still under consideration and no final decision on the scale or timing of duty-free imports has been announced.