Indian Government Tightens Sugar Sector Rules with Revised Control Order for Transparency

The government has introduced the Sugar (Control) Order 2025 to ensure fair prices for small sugarcane farmers and improve regulatory oversight of the sugar sector. Under the new order, raw sugar will now be included in the total sugar stock calculations nationwide. This decision comes in response to concerns that raw sugar is being marketed under misleading labels such as 'khandsari' or organic, a practice the regulation seeks to prevent.

India currently has 373 khandsari units with a combined processing capacity of 95,000 tonnes of cane per day. Among these, 66 units have a daily capacity exceeding 500 tonnes, accounting for 55,200 tonnes collectively. The revised order mandates that khandsari units with a capacity above 500 tonnes must pay the Fair and Remunerative Price (FRP) to sugarcane farmers, ensuring better compensation for small growers. Additionally, this measure will help the government obtain a more precise assessment of national sugar production, as khandsari sugar output has previously remained unregulated, with larger units avoiding FRP obligations.

The regulation also extends to by-products such as bagasse, molasses, press mud cake, and ethanol derived from sugarcane by-products, juice, syrup, or sugar. By monitoring these derivatives, authorities aim to prevent excessive diversion of sugar and maintain adequate domestic supply. To standardize terminology, the order adopts definitions for various sugar types—including Plantation White Sugar, Refined Sugar, Khandsari Sugar, Gur, Bura Sugar, Cube Sugar, and Icing Sugar—from the Food Safety and Standards Authority of India (FSSAI).

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In a technological advancement, the Food Ministry’s portal will now integrate with sugar mills through an API, enabling real-time linkage of GSTN sales data with government records. Furthermore, the new Sugar Control Order consolidates pricing regulations within a single framework, eliminating the earlier requirement for a separate Sugar Price (Control) Order. This streamlining is expected to enhance compliance and transparency across the industry.