Modi government takes big decision, orders complete ban on sugar exports till September amid domestic supply concerns

India, one of the world’s largest sugar exporters after Brazil, had earlier permitted mills to export 1.59 million metric tonnes of sugar.

Written by: Victor Dasgupta Edited by: Victor Dasgupta

Updated: May 14, 2026, 9:08 AM IST

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https://www.india.com/business/narendra-modi-sugar-ban-dgft-foreign-trade-white-sugar-el-nino-indian-economy-food-supply-west-asia-crisis-cooling-period-domestic-supply-8414028/ Copy

Prime Minister Narendra Modi (PTI Image)

New Delhi: In a significant development, the Modi government has imposed a ban on sugar exports with immediate effect till September 30, 2026, or until further orders. The move has been taken to keep domestic prices under control and ensure adequate local availability amid concerns over lower production. It is important to note that the notification issued by the Directorate General of Foreign Trade (DGFT), the government, changed the export policy for sugar under ITC (HS) codes 1701 14 90 and 1701 99 90 from “restricted” to “prohibited.” The order covers the export of raw sugar, white sugar, and refined sugar.

Exemptions Granted for Certain Exports

The notification further added that the ban will remain in force until September 30 or until it is extended further. If the restriction is not extended, the export policy will revert to the “restricted” category. The Modi government clarified that the export ban will not apply to shipments sent to the European Union and the United States under the CXL and TRQ quota systems.

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Here are some of the key details:

• Exports carried out under the Advance Authorization Scheme (AAS) will continue to be allowed.
• Shipments made on a government-to-government (G2G) basis for food security purposes will also continue.
• Consignments already in the export process would be permitted under certain specified conditions.
• The decision was taken to keep domestic prices under control.
• Shipments will still be allowed to proceed if loading had already begun before the date of the notification
• Shipping will be allowed bill had already been filed and the vessel had berthed or anchored at an Indian port before the order came into effect.
• Exports will be permitted in cases where consignments had already been handed over to customs authorities or custodians before the notification was issued.

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Production concerns behind move

According to a Reuters report, the Modi government’s decision was likely aimed at controlling domestic prices as production is expected to lag consumption for a second consecutive year due to weakening sugarcane yields in key growing regions.

Fears that El Niño conditions could disrupt the upcoming monsoon have also raised concerns over next season’s output. India, one of the world’s largest sugar exporters after Brazil, had earlier permitted mills to export 1.59 million metric tonnes of sugar. Traders had already signed contracts for around 800,000 tonnes, of which more than 600,000 tonnes had been shipped.

“The government had provided additional export quotas in February, which encouraged traders to sign export deals. It will now be a headache for traders to fulfill those export orders,” a Mumbai-based dealer with a global trade house told Reuters.