Evolution of India’s Sugar Industry: Policy Reforms and Committee Interventions from 1932 to 2025

Abstract

India’s sugar industry has transformed dramatically over the past nine decades, shaped by evolving institutional frameworks that altered incentives, reduced uncertainty, and redefined sectoral performance. Drawing on North’s (1990) institutional economics, Boyer’s (2004) regulation theory, and Schumpeter’s (1983) innovation dynamics, this study analyses how the major Acts and policy interventions, from the Sugar Industry Protection Act (1932) to the modernized Sugar Control Order (2025), guided the industry’s transition from protectionism to regulated expansion, partial liberalization, and contemporary sustainability-oriented governance. Tariff protection in the 1930s enabled the industry to grow from 31 mills producing 0.17 million tonnes to over 700 mills producing 33 million tonnes by 2023–24, while post-independence price controls and the Fair and Remunerative Price (FRP) ensured farmers received returns of about 107% of production costs. Liberalization in the 1990s-2000s and recent biofuel policies, including the National Biofuel Policy (2018, revised 2022) and E20 blending targets, catalysed technological modernization and expanded ethanol capacity. Current initiatives such as One District One Product (ODOP) and the Sugar Control Order (2025) integrate sustainability, rural development, and market mechanisms. The paper argues that India’s sugar policy evolution exemplifies pragmatic institutional governance balancing market efficiency, farmer welfare, and environmental objectives.