New Delhi: India permitted sugar exports during the 2025-26 sugarcane crushing season, which has led to a potential supply crunch just before the approaching festival months when demand peaks. The government now plans to import roughly the same quantities of sugar that was earlier exported, to make up for this shortfall, say reports.It has also imposed new stock limits for manufacturers, including of food, sweets and soft drinks. From September 1, 2026, bulk consumers using more than 10 metric tonnes of sugar a month will be allowed to hold only 15 days’ stock, reports said.It is the first time in a decade that India will import sugar, and it is based on faulty assessments of supply and demand made earlier in the sugarcane crushing season, said a report in Business Standard.Production was insufficient relative to consumption in the 2025-26 season that started on October 1, 2025, but this appears to have been overlooked in the bid to allow exports last year, the report said. As a result, prices have spiked in the domestic market.The publication cites an industry executive as saying, “someone somewhere was misleading the system into believing that the sugar fundamentals in the country were strong, while in reality production was not making up for consumption”.A Reuters report has cited Ashok Jain, president of the Bombay Sugar Merchants Association, as saying that with local supplies low, “only imports can help increase supplies and bring down prices during the festival season”.India has also slashed the import duty on sugar from 100% to nil for the “limited imports” it plans to allow, reports Reuters separately.In case there are imports, the gains to importers might be impressive. The production cost of sugar is currently Rs 4,200-4,300 per quintal (100 kilos). The landed import cost is Rs 3,840 per quintal at nil duty. The domestic selling price is Rs 5,400–5,560 per quintal, a Rs 1,560–1,720 difference.Prices of sugar in the domestic market increased significantly since exports were allowed until date. March prices are estimated at Rs 3,650 (ex-sugar mill in Maharashtra) as per the BS report.The difference between import cost and the selling price is the margin available to importers. Even if an Rs 500 additional per-quintal cost is incurred by importers, an industry expert tells the publication, the margins will be a “considerable positive”. (Roughly Rs 1,000 per quintal).As per the BS report, the Indian government permitted exports of 2 mt of sugar in November 2025. Even as the February-March sugarcane crushing season showed signs of a lull, a further 0.8 mt of sugar was actually exported. Thereafter, sugar exports were banned.Reuters also reports, citing a government official, that multiple measures to “check prices” are being considered. “Since there has been a completely unwarranted increase in prices, we will have to take measures to check prices, and we are considering a whole host of measures and tools,” said a government source who spoke on condition of anonymity, citing official rules.Both publications said India might import upto 1 mt sugar. Prices spiked recently on the New York benchmark index, to hit 17.47 cents per pound (raw sugar), after news of India’s plans to import sugar a decade after it relied on domestic production to meet demand.As per an official BS spoke to, India should have normative closing sugar stocks of 6 mt. That is, once sugarcane, the raw material for most of India’s sugar production, has been turned into sugar by the mills, and all domestic demand has been catered to, India should still have 6 mt left in stock.At present, it has around 3.5 to 3.9 mt. This is significantly below the opening stock of 4.7 mt that the season started with, and the shortfall comes close to the 0.8 mt sugar that was exported.“India’s actual net sugar production in the 2025-26 season is around 27.9 mt, after accounting for 2.4 mt of ethanol,” wrote BS. With the 4.7 mt stocks added, the total available sugar is around 32.6 mt. This was the sugar availability prior to exports.Sugar consumption is estimated at 28 mt. This is why, as a result of lower-than-expected production, falling stocks, domestic consumption and exports the stocks available at this moment are below the comfort zone.