“India Imports Sugar After 10 Years: Is Modi Government’s Sugar Policy Failing the Common Man?

India is the world’s second-largest sugar producer, yet the country has now been forced to look overseas for sugar. On August 20, 2026, the government approved duty-free imports of 10 lakh tonnes (1 million tonnes) of raw sugar until October 31—the first such domestic-use imports in nearly a decade.

This is more than a market decision; it is a political embarrassment for the Narendra Modi government. The government's own data shows that the average retail price of sugar rose from ₹48.18 per kg on July 20 to ₹65 per kg on August 20—an increase of about 34.9% in a month.

The bigger problem is that production forecasts have gone badly wrong. Sugar output for the current season is now estimated at around 306 lakh tonnes, compared with the initial estimate of 343 lakh tonnes—a shortfall of roughly 11%. Crop diseases such as Red Rot and Top Borer, along with waterlogging from excessive rainfall, have damaged production.

Critics are also questioning the government's ethanol policy. The argument is straightforward: when sugarcane is diverted towards ethanol, less can potentially be processed into sugar. However, the government strongly rejects the claim that ethanol diversion is responsible for the current price surge, pointing out that the share of sugar diverted to ethanol has actually fallen from about 12% in 2022–23 to around 9% in 2025–26.

So where is the policy failure?

The government says the crisis is primarily due to lower production, weather damage, festive demand, speculation and hoarding. But critics can still ask why supply estimates and market intervention failed to prevent such a sharp price rise before the festive season.

For the common consumer, the politics is simple: India produces millions of tonnes of sugar, yet families are paying more and the government is importing sugar to cool prices.

Is this merely a temporary supply shock—or evidence that India’s sugar and ethanol policies need a serious rethink?