The sugar sector awaits policy clarity around the mix of ethanol quotas between grain-based and sugarcane-based distilleries; ethanol pricing; export quotas and subsidies in case of subdued international pricing as well as alignment of the sugar MSP to reflect the cost curve. These measures not only aid in the profitability of sugar mills but also ensure balanced supply. Diversifying into non-sugar segments like bioplastics can improve revenue and yield higher profit margins for the sugar mills.

Export policy – Although the Government of India has allowed sugar exports of 2.0 million MT (7% of India’s net annual production) in SY2026, India may only be able to export limited quantity of this quota due to weak global prices. International sugar prices in SY2026 remained lower than the current cost of sugar production and the ongoing domestic prices with surplus sugar supply from Brazil, the leading producer of sugar, globally.

Molasses policy – Molasses exports from India have experienced a notable decline in FY2025, due to the imposition of a 50% export duty on molasses effective January 2024 to support India’s ethanol blending programme. However, in November 2025, the Government removed this export duty to address surplus sugar stocks projected for SY2026. This policy change will support molasses exports, going forward