Centre Allows Duty-Free Sugar Imports of 10 Lakh Tonnes, Caps Bulk Buyers' Stock to Ease Prices

The government has allowed duty-free imports of 10 lakh tonnes of raw sugar under a tariff rate quota (TRQ) until October 31, 2026, in a bid to boost domestic availability and curb rising prices. The decision comes alongside new stockholding limits on bulk consumers to prevent hoarding during the festive season.

The Directorate General of Foreign Trade (DGFT) issued a notification stating that the import policy for raw sugar has been amended to permit 10 lakh metric tonnes of duty-free imports under the TRQ. Applications are invited online from millers and refiners with functioning refining capacity, with the application window open from August 21 to August 28, 2026. Importers must submit a self-declaration of refining capacity along with supporting documents such as a consent-to-operate certificate from the State Pollution Control Board. Preference will be given to those who commit to completing imports by October 15, 2026.

According to the DGFT notification, importers who fail to utilise or surrender their allocated quantity within the prescribed period will be treated as non-utilised, and may face implications under the TRQ scheme. The move is part of the government's strategy to balance domestic supply and demand as the country heads into the festive months.

Simultaneously, the food ministry has issued the Sugar (Stockholding Limit of Bulk Consumers) Order, 2026. Bulk consumers—defined as confectioners, soft drink manufacturers, food processing units, sweetmeat sellers, and other institutional buyers using at least 10 tonnes of sugar per month—are now restricted to holding stock equivalent to 15 days of their consumption. This order takes effect on September 1 and remains in force until November 30.

An earlier order, effective from August 1 to November 30, capped sugar stock with dealers at 4,000 quintals for 30 days. The new measures are intended to increase supply in the market and curb speculative behaviour.

Prices have surged recently, with the all-India average ex-mill rate touching Rs 5,400-5,500 per quintal this week, up from Rs 3,900 a year earlier, according to industry estimates. Retail sugar prices rose to Rs 52.30 per kg as of August 18, a 13 per cent increase from Rs 46.34 in the same period last year, as per data from the consumer affairs ministry.

The price rise is attributed to a lower opening stock ahead of the 2026-27 sugar season, which begins on October 1. Industry estimates put opening stocks at 40-42 lakh tonnes, while some researchers peg the figure lower at 32-35 lakh tonnes. Both estimates are below the estimated domestic requirement of around 50 lakh tonnes.

Demand for sugar typically rises between August and November due to major festivals such as Ganesh Chaturthi, Dussehra, and Diwali. The stockholding limits apply to entities with an average monthly consumption of not less than 10 tonnes over the past year, excluding the current month. The government has defined bulk consumers to include a wide range of commercial users, ensuring that small retailers and households are unaffected.

Food Minister Pralhad Joshi announced the stockholding limit in a social media post, noting that bulk consumers will not be allowed to hold more than 15 days' worth of stock. The government has stated that these proactive steps will dispel speculation and ensure adequate supply to consumers at reasonable and stable prices over the coming year.