Sugar price hike: Govt allows 10 lakh tonnes duty-free imports, first such move in a decade

Mangalore Today News Network

New Delhi, Aug 21, 2026: The government has allowed duty-free imports of 10 lakh tonnes of raw sugar under the Tariff Rate Quota (TRQ) system until October 31, 2026, as it moves to boost domestic supplies and contain a sharp rise in sugar prices.

The move, announced on Thursday, is the first such duty-free raw sugar import decision in a decade and comes ahead of the 2026-27 sugar season, when domestic demand is expected to rise amid the festive period.

The Directorate General of Foreign Trade (DGFT), in a notification, said, “The import policy for raw sugar is amended to allow 10 lakh MT of duty-free imports under Tariff Rate Quota (TRQ) till October 31, 2026."

Sugar Prices Rise Sharply

The government’s decision comes after a significant increase in domestic sugar prices. All-India average ex-mill sugar prices rose to around Rs 5,400-5,500 per quintal on Tuesday, compared with Rs 3,900 per quintal a year earlier, according to industry data.

Retail sugar prices have also increased. According to data from the Consumer Affairs Ministry, the average retail price of sugar stood at Rs 52.30 per kg on August 18, up around 13% from Rs 46.34 per kg a year earlier.

The price rise has been attributed partly to lower opening stocks ahead of the new sugar season, which begins on October 1.

Govt Caps Sugar Stocks for Bulk Consumers

Alongside allowing imports, the government has introduced restrictions on sugar stocks held by large institutional consumers. Food Minister Pralhad Joshi said bulk consumers using more than 10 tonnes of sugar a month will not be allowed to hold stocks exceeding 15 days of their consumption.

The Food Ministry has notified the Sugar (Stockholding Limit of Bulk Consumers) Order, 2026, which will come into effect from September 1 and remain in force until November 30.

The order covers confectioners, soft drink manufacturers, food processing companies, sweetmeat sellers and other institutional buyers.

A bulk consumer is defined as an institutional buyer with average monthly sugar consumption of at least 10 tonnes over the previous one year, excluding the current month.

Sugar Stock Limits Aim to Prevent Hoarding

The government said the stockholding restrictions are intended to discourage speculative stocking and ensure adequate supplies during a period of higher seasonal demand.

Sugar consumption typically increases between August and November as demand rises during major festivals including Ganesh Chaturthi, Dussehra and Diwali.

The latest restrictions follow an earlier government order, effective from August 1 to November 30, which capped sugar stocks held by dealers at 4,000 quintals for 30 days.

Sugar Availability Concern Ahead of 2026-27 Season

The government has taken the measures amid concerns over the availability of sugar at the start of the 2026-27 season.

Industry estimates suggest opening stocks could be around 40-42 lakh tonnes, while some researchers have estimated a lower range of 32-35 lakh tonnes. This compares with estimated domestic requirements of around 50 lakh tonnes.

The government is therefore looking to supplement domestic supplies through imports while preventing excessive stockpiling by large consumers and traders.

Who Can Import Duty-Free Sugar?

The DGFT has separately issued the modalities for allocation of the 10 lakh tonnes of raw sugar import quota.

Applications will be invited from August 21 to August 28, 2026, from sugar mills and refiners that have their own functional capacity to convert raw sugar into white or refined sugar.

Applicants will have to submit a self-declaration of their refining capacity along with supporting documents, including a copy of the Consent to Operate issued by the relevant State Pollution Control Board.

The government will give preference to importers that undertake to complete their imports by October 15, 2026.

Importers that fail to use or surrender their allocated quota within the prescribed period will be treated as non-compliant.

Why Has the Government Allowed Sugar Imports?

The duty-free import decision is primarily aimed at increasing sugar availability and preventing further escalation in domestic prices.

With the new sugar season beginning in October and festive demand expected to remain strong, the government is seeking to ensure that supplies remain adequate while limiting the ability of bulk consumers and traders to build up excessive inventories.

The combination of duty-free raw sugar imports and tighter stockholding limits is expected to put downward pressure on prices and improve sugar availability in the domestic market.