New Delhi, November 15, 2025 — The Centre has sanctioned the export of 15 lakh metric tonnes (LMT) of sugar for the 2025–26 season, accompanied by a 50% reduction in molasses export duty, in a move aimed at supporting domestic mills and balancing surplus stocks.
The export quota is based on the average production of sugar mills over the past three seasons (2022‑23, 2023‑24, 2024‑25), with each mill allocated a proportionate share. The government’s approval represents a 50% increase over the previous season, which saw a quota of 10 LMT. Industry bodies, including the Indian Sugar & Bio-Energy Manufacturers Association (ISMA), had requested a 20 LMT quota, citing surplus production and export demand.
🔑 Key Highlights
Export Quota: 15 LMT for 2025‑26
Molasses Duty: Reduced by 50%, enhancing by-product profitability for mills
Allocation: Based on three-year production averages; mills receive roughly 5.286% of their average production
Previous Quota: 10 LMT
Industry Request: 20 LMT
📈 Rationale Behind the Move
Manage Surplus: Domestic sugar production has exceeded expectations, while diversion to ethanol was lower than projected.
Support Mills: Enhanced export opportunities and molasses duty cuts improve cash flow for mills.
Price Stabilisation: Exporting excess sugar helps prevent domestic prices from plummeting due to oversupply.
🌐 Industry & Market Impact
Last season, India exported 7.75 LMT of sugar, demonstrating strong global demand.
The duty cut on molasses is expected to increase profitability for mills producing this by-product.
While the quota falls short of the industry’s 20 LMT request, analysts say it strikes a pragmatic balance between domestic supply and international market demand.
⚡ What to Watch
Uptake of the full 15 LMT quota by mills
Impact on global sugar prices
Payment flow to farmers and cash reserves of mills
Future export quotas if surplus production persists
The government’s move signals a proactive strategy to manage India’s sugar surplus while simultaneously supporting mills and stabilising domestic markets. By allowing exports and reducing molasses duty, authorities aim to boost revenues and maintain sustainable growth in the sector.
