The Indian sugar industry is poised for sustained growth, backed by positive consumption trends and, robust production outlook. The industry feels the recent GST reform is a step in the right direction that is expected to stimulate demand.
Commenting on the GST reforms, Deepak Ballani, Director General (DG) of the Indian Sugar and BioEnergy Manufacturers Association (ISMA), said that bringing refined sugar, syrups, and confectionery products under the 5% GST slab is expected to provide a consumption stimulus. “The price rationalisation will make processed sugar-based products more affordable, particularly in urban markets, where demand elasticity is higher due to greater exposure to packaged and branded products. However, rural consumption too will benefit, though at a relatively slower pace, as increasing penetration of packaged foods and rising disposable incomes begin to reshape consumption patterns”.
He said overall, the GST cut is likely to accelerate domestic demand for processed sugar products, complementing the natural growth trajectory of sugar consumption in India. “We foresee stronger uptake in urban centres initially, followed by steady catch-up in rural markets as distribution networks deepen and affordability improves”.
The DG gave a peek into the new sugar season’s production and consumption outlook as well. He said that the domestic consumption of sugar in India is currently around 280 lakh tons annually. “However, going forward, we anticipate a sustained growth of 1.5% to 2% CAGR in sugar consumption, as highlighted by independent research studies and industry projections. A study in this regard has also been conducted by ISMA”.
From a production standpoint, the outlook remains robust. Ballani said that the First Preliminary Projections released by ISMA for 2025-26 are very positive, with strong prospects beyond 2026-27 as well. “Key sugar-producing states such as Maharashtra, Karnataka, and Uttar Pradesh are showing encouraging trends. In Maharashtra and Karnataka, improved sugarcane crop with rising yields and good reservoir levels ensures sufficient water availability, while in Uttar Pradesh, varietal advancements and large-scale replacements are significantly boosting yield potential. This assures a healthy balance between demand and supply in the medium term”, he concluded.
Vijendra Singh, Executive Director & Deputy CEO of Shree Renuka Sugars Limited and President, AIDA, said that the industry acknowledges the decision to reduce GST on refined sugar, syrup, and confectionery items. This adjustment is anticipated to support the Indian economy and contribute positively to its growth.
He said, “The reduction of GST for the agriculture sector is expected to provide substantial relief to farmers, as well as facilitate a stable supply and improved quality and quantity of raw materials for the sugar industry. Additionally, lower GST rates on confectionery, bakery, and other processed sugar products may encourage higher sugar consumption within the country, which could have a favourable impact on the sugar industry”.
Singh concluded by saying that overall, this is a big reform and it will fuel the economy of the nation, and the sugar industry is a part of the economy, so it will also grow.
