Sugar exports may be capped, surplus diverted to ethanol

New Delhi: If India's approved export quota of sugar is not utilised, the surplus would be diverted towards ethanol production, said Sanjeev Chopra, secretary, Department of Food and Public Distribution on Tuesday.

"If not exported, then the export will be capped so that it can be diverted towards ethanol," Chopra said, adding the remainder of the sugar from the unutilised export quota will be a part of the closing balance for next year.

In February, the government increased its sugar export quota to 2 million tonnes, adding 500,000 tonnes to the 1.5 million tonnes approved earlier. Despite global sugar prices showing some recovery recently, exports have remained subdued due to reduced demand from the Middle East and Central Asian markets, increased shipping costs, higher insurance premiums, and supply chain disruptions amid the war in West Asia.


The government has also set up a committee to examine the way forward for increasing the blending level for ethanol as it has received several requests from the industry to increase the levels.

India's Ethanol Blending Programme (EBP) aims to blend ethanol with petrol to reduce crude oil imports, save foreign exchange, and lower emissions. The target to achieve 20% blending (E20) was advanced to 2025-26 from 2030, with the national average blending reaching 19.05% as of July 2025.

The committee has official representatives from the food ministry, the ministry of heavy industries and petroleum and natural gas, Chopra said, adding that it is expected to come up with suggestions before the end of the ongoing ethanol year.

India produces surplus ethanol of 2,000 crore litres per annum prompting the government to think of other uses apart from blending.