As the Union Budget inches closer, the sugar industry lays down their wish list for the sector.
Tarun Sawhney, Vice Chairman and Managing Director, Triveni Engineering & Industries Ltd., said that the domestic sugar sector has made steady progress in the 2025–26 season, supported by adequate sugarcane availability, improved field-level productivity, and smoother operations across major producing regions.
However, rising cane prices and falling sugar realisations are putting financial pressure on sugar mills. “Therefore, there is a critical need for a revision of the minimum selling price (MSP) for sugar to around Rs 40–41 per kg, which has remained unchanged at Rs 31 per kg since 2019, to ensure mill viability and timely payments to farmers,” he said.
Sawhney said that the sugar diversion for ethanol production has been restricted to 34 lakh tonnes in the first tender cycle, with ethanol allocation reaching only 290 crore litres this year, which is significantly below the expected 450 crore litres.
He said, “This shortfall has created a supply imbalance. Compounding the issue, ethanol production costs are 70–75% dependent on raw materials, and the fair and remunerative price (FRP) has increased 29% to Rs 355 per quintal. Despite these rising input costs, ethanol prices remain unchanged, undermining distillery viability”.
Sawhney highlighted the importance of looking beyond E20 and said, “Moreover, with India now achieving 20% ethanol blending (E20), the government needs to articulate a clear roadmap beyond E20. Targeted financial support for advanced biofuels such as SAF and compressed biogas (CBG) is essential as well”.
With surplus ethanol capacity and established production infrastructure already validated in India, biofuels offer an immediate pathway to reduce emissions, cut fuel imports and stabilise rural incomes.
He said that as Budget 2026–27 approaches, balancing short-term relief with long-term clean energy policy support will be critical to stabilise the sugar industry, protect farmer incomes and support India’s clean energy transition.
