Pak sugar in India? Millers hopeful despite trade ban as Delhi removes import duty

India’s sugar industry has taken a major step toward easing import restrictions, allowing duty-free entry of up to 10 lakh metric tonnes of raw sugar under a Tariff Rate Quota (TRQ) until October 31, 2026. This decision has sparked cautious optimism among Pakistani sugar producers who hope to leverage the policy change to export surplus stocks to India, despite ongoing diplomatic and security tensions between the two nations. The move by the Indian government follows a sharp rise in domestic sugar prices, which reached an average of Rs 4,000–5,500 per quintal (100 kg) on August 18, up from approximately Rs 3,900 a year earlier. Industry data highlights the growing strain on the Indian market, prompting the government to introduce measures to curb speculation and hoarding. These actions have created an urgent need for additional supply, making India a potentially attractive destination for Pakistan’s excess production. Pakistan’s sugar mills, already grappling with a surplus of over 1.2 million tonnes, are now pressing their government to facilitate exports to India. A senior representative of the Pakistan Sugar Mills Association (PSMA), Ch Muhammad Waheed, emphasized the financial benefits of such a move. He noted that exporting to India could provide much-needed foreign exchange, ease liquidity issues for mills, lower storage costs, and ensure timely payments to sugarcane farmers. Waheed also highlighted the broader economic implications, suggesting that resuming sugar trade could help revive a key channel of bilateral commerce between the two South Asian neighbors. Despite these hopes, direct trade between India and Pakistan remains stalled due to political and security-related disputes. The Attari-Wagah border and several air routes remain closed, complicating the logistics of cross-border shipments. While the Indian import policy opens a theoretical pathway for Pakistan’s sugar, practical implementation will depend on government approval and the establishment of a viable trade mechanism. For now, the initiative appears more like an opportunity than an immediate solution. The Pakistani sugar industry faces mounting pressures as it prepares for the upcoming sugarcane crushing season. With expectations of another bountiful harvest, mills fear that inventory levels could balloon, further straining their ability to pay farmers for their crops. This situation has intensified calls for alternative markets, with India emerging as a prime candidate given its geographical proximity and the current state of its sugar market. In response to the evolving scenario, the Directorate General of Foreign Trade (DGFT) stated that the TRQ was introduced to enhance domestic availability and stabilize prices. The policy reflects a strategic shift in India’s approach to sugar imports, which had long been tightly controlled to protect domestic producers. However, the recent liberalization signals a recognition of the challenges posed by rising prices and limited domestic supply. As the situation unfolds, both governments will likely monitor developments closely. For Pakistan’s sugar mills, the prospect of accessing a new market offers a lifeline during a period of financial uncertainty. Meanwhile, India’s policymakers must balance the need for increased supply against concerns about protecting local industries. Whether this leads to meaningful trade or remains a symbolic gesture remains to be seen. For now, the focus remains on the practical steps required to turn this opportunity into reality.