India Bans All Sugar Exports Until September 2026 to Protect Domestic Supply

India, the world's second-largest sugar producer after Brazil, prohibited all sugar exports on 13 May 2026 with immediate effect. The Directorate General of Foreign Trade, under the Ministry of Commerce and Industry, issued a notification moving raw sugar, white sugar and refined sugar from the restricted category to the prohibited category. The measure runs until 30 September 2026 or until further government orders.

The decision reverses a more relaxed stance taken only months earlier. In February 2026 the government had granted additional export quotas, bringing the total approved volume for the season to about 1.59 million metric tons. That encouraged traders to sign export contracts covering roughly 800,000 tons. By the time the ban was announced, more than 600,000 tons had already been shipped, leaving exporters with signed orders they can no longer fulfil.

The government justified the move by pointing to tighter domestic supply. Indian sugar output is now expected to fall short of consumption for a second year in a row as cane yields weaken in key growing states. Forecasts that El Nino conditions could disrupt the coming monsoon have added further uncertainty over next season's crop. By halting exports, New Delhi aims to keep domestic retail prices stable and protect food security ahead of the festive period.

The notification includes several carve-outs. Shipments already handed to customs, and vessels that had berthed or anchored at Indian ports with an allocated rotation number before the notification, may still load. Exports to the European Union and the United States under existing CXL and tariff rate quota arrangements continue, as do shipments under the Advance Authorisation Scheme. The government also left the door open to government-to-government sales for countries with specific food security needs.

Global markets reacted quickly. New York raw sugar futures rose more than 2 percent and London white sugar futures climbed about 3 percent after the announcement. The ban is expected to tighten world supply and hand an opening to rival exporters Brazil and Thailand, which can increase shipments to buyers across Asia and Africa.

The countries most exposed are India's traditional sugar customers. Indonesia and Bangladesh are the largest buyers of Indian raw sugar, followed by Saudi Arabia, Iraq and Malaysia. Several smaller economies in the Gulf, East Africa and South Asia, including the United Arab Emirates, Somalia, Sudan and Sri Lanka, also rely on Indian sugar and may face higher import bills as they turn to Brazil and Thailand for replacement volumes.

As of 14 May 2026 the ban remains in force and no extension or early lifting has been signalled. If the prohibition is not extended beyond 30 September 2026, the export policy will automatically revert to the restricted category.