Amendment in Export Policy for Pharma Grade Sugar

Amendment in Export Policy for Pharma Grade Sugar – Notification No. 17/2025-26
Understanding India’s Pharma Grade Sugar Export Policy Amendment (June 2025)

On June 17, 2025, the Government of India, through the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce & Industry, issued Notification No. 1+12025-26, amending the export policy for Pharma Grade Sugar. This blog post breaks down the key changes, their implications, and what they mean for pharmaceutical exporters and the global market.

Background: India’s Sugar Export Policy

India is one of the world’s largest sugar producers, and its export policies are tightly regulated to balance domestic supply, global trade commitments, and industry needs. The export of sugar (including raw, white, refined, and organic varieties) is generally classified as “Restricted” under the Foreign Trade Policy 2023. This means exporters require specific permissions from the Directorate of Sugar, part of the Department of Food and Public Distribution (DFPD).

However, certain exceptions exist for exports to specific regions under predefined quotas:

• European Union (EU): Exports under the CXL Quota are “Free” but require a Certificate of Origin issued by the Additional DGFT, Mumbai, and are subject to quantitative ceilings.
• United States (USA): Exports under the Tariff Rate Quota (TRQ) are managed by APEDA (Agricultural and Processed Food Products Export Development Authority) and also require export details to be submitted.
• United Kingdom (UK): Similar TRQ arrangements are in place, with APEDA as the implementing agency.

The new amendment introduces a specific provision for Pharma Grade Sugar, a specialized product used in pharmaceutical manufacturing, which was not previously addressed distinctly in the policy.

What is Pharma Grade Sugar?

Pharma Grade Sugar is a highly purified form of sugar that meets stringent quality standards for use in pharmaceutical products, such as syrups, tablets, and injectable solutions. Its production involves rigorous testing to ensure compliance with pharmacopoeia standards (e.g., Indian Pharmacopoeia or USP). Unlike regular sugar, it must be free from impurities and contaminants, making it a niche product with specific export potential.

Key Changes in the Notification

The amendment adds a new clause (Point 5) to the export policy conditions for ITC (HS) Codes 17011490 and 17019990, which cover “Other” categories of cane and refined sugar. The key points are:

1. Restricted Export Authorization for Pharma Grade Sugar:
   • Exporters can now export Pharma Grade Sugar under a Restricted Export Authorization, a significant shift from the blanket restrictions on sugar exports.
   • This authorization allows “bonafide” pharmaceutical exporters to access global markets for this high-value product.
2. Annual Export Cap:
   • Total exports of Pharma Grade Sugar are capped at 25,000 Metric Tons (MTs) per financial year. This limit ensures controlled export volumes to prevent domestic shortages or price volatility.
3. Safeguards for Compliance:
   • Exporters must submit a valid drug manufacturing license issued by the concerned State Licensing Authority, ensuring only legitimate pharmaceutical entities can export.
   • Test reports and certifications from NABL (National Accreditation Board for Testing and Calibration Laboratories) accredited labs are mandatory to confirm compliance with Pharma Grade Sugar specifications at the time of export.

Implications of the Amendment

For Pharmaceutical Exporters

• New Market Opportunities: The policy opens a regulated pathway for Indian pharmaceutical companies to export Pharma Grade Sugar, tapping into global demand for high-quality pharmaceutical ingredients.
• Compliance Requirements: Exporters must invest in robust quality control and documentation processes to meet the stringent requirements, which could increase operational costs but ensure credibility in international markets.
• Limited Quota: The 25,000 MT cap may lead to competition among exporters, requiring strategic planning to secure authorizations within the quota.

For the Indian Sugar Industry

• Value Addition: By promoting Pharma Grade Sugar exports, the policy encourages sugar mills to diversify into high-value products, potentially improving profitability.
• Controlled Impact: The cap ensures that the export of Pharma Grade Sugar does not disrupt the domestic sugar market, which is critical for food security and consumer prices.

For Global Markets

• Reliable Supply Source: India’s entry as a supplier of Pharma Grade Sugar could enhance global supply chains, especially for countries reliant on pharmaceutical imports.
• Quality Assurance: The mandatory NABL certifications align with international standards, making Indian Pharma Grade Sugar competitive in regulated markets like the EU and USA.

Why This Matters

The amendment reflects India’s strategic approach to balancing trade liberalization with domestic priorities. By carving out a niche for Pharma Grade Sugar exports, the government aims to:

• Support the pharmaceutical sector, a key contributor to India’s export economy.
• Promote value-added agricultural products, aligning with the “Make in India” initiative.
• Maintain regulatory oversight to prevent misuse of export authorizations.

Challenges Ahead

While the policy is a step forward, exporters may face challenges:

• Bureaucratic Hurdles: Obtaining Restricted Export Authorizations and complying with documentation requirements could be time-consuming.
• Quota Allocation: The DGFT has not specified how the 25,000 MT quota will be allocated, which could lead to uncertainties.
• Global Competition: Indian exporters will need to compete with established suppliers in markets like the EU and USA, where quality and pricing are critical.

Conclusion

The June 2025 amendment to India’s sugar export policy is a targeted move to support the pharmaceutical industry while maintaining control over sugar exports. By allowing up to 25,000 MTs of Pharma Grade Sugar to be exported annually under strict conditions, India is positioning itself as a reliable supplier in the global pharmaceutical supply chain. For exporters, this is an opportunity to diversify and grow, provided they navigate the regulatory landscape effectively.

For the latest updates on export procedures, exporters should monitor notifications from the DGFT and APEDA websites.

Disclaimer: This blog is for informational purposes only and does not constitute legal or trade advice. Exporters should consult official government notifications and relevant authorities for compliance.

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