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DGFT issued Notification 16/2026-27 under the authority of Section 3 read with Section 5 of the Foreign Trade (Development & Regulation) Act, 1992, in conjunction with Para 1.02 and Para 2.01 of the Foreign Trade Policy, 2023. The notification amends Schedule II (Export Policy) of the ITC(HS) Classification of Export & Import Items by changing the export-policy column for two tariff lines:
| ITC(HS) | Description | Old policy | New policy |
|---|---|---|---|
| 1701 14 90 | Raw cane sugar (other) | Restricted | Prohibited |
| 1701 99 90 | White/refined sugar (other) | Restricted | Prohibited |
"Prohibited" is a harder legal category than "Restricted" — under the FTP 2023 framework, restricted goods can be exported under a licence or quota; prohibited goods cannot be exported at all except via explicitly enumerated exemptions. The escalation effectively removes discretionary exporter-licence processing from the equation and imposes a blanket stop-order that applies until the sunset date or a government notification reversal.
India's sugar output forecast for 2025-26 marketable season stood below the 2024-25 record on account of erratic monsoon distribution in key growing states (Maharashtra, Uttar Pradesh, Karnataka). Domestic retail and wholesale sugar prices had begun inching upward from April 2026, prompting the Food Ministry and DGFT to move from the prior restricted-licence regime to an outright prohibition well ahead of the October-start crushing season. The pattern mirrors earlier food-security export controls: India banned non-basmati white rice exports in July 2023 and onion exports in December 2023, both in supply-cycle anticipation rather than after a shock had materialised.
India is the world's second-largest sugar producer (after Brazil) and has been a top-3 exporter in most recent years. Its market withdrawal when banned tends to lift ICE No. 11 (raw) and ICE No. 5 (white) reference prices, benefiting competing exporters — notably Brazil, Thailand, Australia, and Pakistan.
in normal years) tightens the world export balance; net importers in Indonesia, Bangladesh, the Middle East, and Sub-Saharan Africa face higher import costs for the duration of the ban.
Nation Thailand press coverage (2026-05) noted Thai mills pivoting to fill the gap. Brazil's centre-south mills, already the dominant global supplier, see upside in prices.
treaty-bound tariff-line volumes continue to flow, avoiding a formal trade dispute.
unless extended. If the 2026 kharif cane harvest looks strong by August–September, government is likely to let the ban expire as scheduled. An extension would signal a more prolonged supply stress.
advance estimates by September).
releases — the trigger for reversal is domestic stocks rebuilding above ~6–7 MT buffer.
regime allowed diversion of cane juice to ethanol; a sugar-price run could prompt renegotiation of blending-mandate offtake.