New Delhi: The Indian sugar industry has the potential to significantly boost its contribution to the country’s Gross Domestic Product (GDP), increasing from the current 1-1.15% to 3%, according to Union Minister Nitin Gadkari. Emphasizing the importance of improving per-acre sugarcane production, he highlighted the sector’s vast potential for economic growth and sustainability.
Sugar Industry’s Role in India’s Economy
Agriculture remains the backbone of the Indian economy, providing livelihood to approximately 42.3% of the population and contributing 18.2% to the national GDP. The sugar industry, a key component of the agricultural sector, is poised for major expansion if proper policies and incentives are implemented.
“The Indian sugar industry has the potential to contribute up to 3% of the country’s GDP,” Gadkari stated, urging for an increase in production efficiency and technological advancements to achieve this goal.
Boosting Ethanol Production & Government Initiatives
Highlighting the government’s efforts to promote alternative fuel production, Gadkari mentioned that steps are being taken to encourage ethanol exports. This comes as part of India’s broader strategy to enhance energy security and reduce dependence on fossil fuels.
The Union Cabinet recently approved a 3% increase in the procurement price of ethanol derived from C-heavy molasses, raising it to Rs 57.97 per litre for the 2024-25 supply year. However, procurement rates for other ethanol feedstocks remain unchanged.
This price adjustment is expected to incentivize ethanol production from sugar industry byproducts, aligning with India’s ambitious goal of achieving 20% ethanol blending in petrol by 2025-26.
Impact of Sugar Export Controls & Need for Policy Reforms
While discussing government policies, Gadkari noted that India’s approach to regulating sugar exports has both advantages and drawbacks. He emphasized the need to reconsider current policies to maximize benefits for farmers and industry stakeholders.
“Indian policymakers, regardless of which party is in power, tend to have an urban-centric mindset. Their primary concern revolves around inflation in four key products—sugar, oil, wheat, and rice,” he said, pointing out the challenges in price management and crop selection.
He also highlighted the Minimum Support Price (MSP) issue, stating that some crop MSPs are higher than market rates, yet there has been little effort to shift cropping patterns in a way that benefits farmers and the economy.
Diversification and Technology Adoption in the Sugar Industry
Gadkari praised the recent diversification trends within Indian agriculture and the sugar industry, which have started yielding positive results. He advocated for the adoption of advanced drone technology and modern agricultural techniques to further improve productivity and efficiency in sugarcane farming and ethanol production.
Future Outlook
As India moves toward a more sustainable and self-reliant energy model, the sugar industry is expected to play a crucial role in the transition. By boosting ethanol production and implementing strategic policy changes, the sector could achieve its full economic potential, significantly increasing its share in India’s GDP while ensuring environmental and economic sustainability.
With continued support from the government and industry leaders, the sugar sector could become a major growth driver, benefiting farmers, consumers, and the overall economy.