What Happened
- The Government of India approved the export of 25 lakh metric tonnes (LMT) of wheat, along with an additional 5 LMT of wheat products, in a significant relaxation of the export ban in place since May 2022.
- An additional 5 LMT of sugar exports were also cleared for willing sugar mills during the 2025-26 sugar season, on top of earlier approvals.
- The decision was driven by comfortable domestic wheat stocks -- private entities hold approximately 75 LMT (32 LMT higher than last year), and FCI stocks are projected to reach 182 LMT by April 1, 2026.
- The move is aimed at stabilising domestic markets, preventing price crashes, and ensuring remunerative returns to farmers.
- Sugar exports will be allocated pro-rata to willing mills, with the condition that 70% of allocated quota is exported by June 30, 2026.
Static Topic Bridges
India's Wheat Export Policy -- From Ban to Relaxation
India imposed a blanket ban on wheat exports on May 13, 2022, through a Directorate General of Foreign Trade (DGFT) notification under the Foreign Trade (Development and Regulation) Act, 1992. The ban was triggered by a severe heatwave that reduced the 2021-22 rabi crop from an expected 111 million tonnes to approximately 99 million tonnes, coinciding with the Russia-Ukraine war-driven global wheat price surge. The ban represented a policy reversal -- just two days earlier, the government had announced plans to export 10 million tonnes.
- Wheat export ban: May 13, 2022 (DGFT Notification No. 6/2015-2020, amended)
- Legal basis: Section 3 of the Foreign Trade (Development and Regulation) Act, 1992
- India is the world's 2nd largest wheat producer (approximately 114 million tonnes, 2024-25 estimate) after China
- FCI buffer norms: April 1 wheat stocks should be at least 74.6 LMT (operational + strategic reserves)
- Export ban exemptions (2022): pre-contracted shipments with irrevocable LCs; government-to-government aid
- Wheat flour (atta) exports also restricted in August 2022; wheat product restrictions now being eased
Connection to this news: With FCI stocks projected at 182 LMT (nearly 2.5 times the buffer norm of 74.6 LMT), the government has shifted from an export restriction stance to a price support stance, using exports as a tool to prevent domestic prices from falling below MSP.
Minimum Support Price (MSP) and Agricultural Price Policy
The Minimum Support Price is the price at which the government purchases crops from farmers, acting as a price floor. MSP is recommended by the Commission for Agricultural Costs and Prices (CACP) and approved by the Cabinet Committee on Economic Affairs (CCEA). MSP is announced for 23 crops (14 kharif, 6 rabi, 2 commercial, 1 oilseed). Since 2018-19, the government has set MSP at a minimum of 1.5 times the comprehensive cost of production (A2+FL cost), following the Swaminathan Committee recommendation (National Commission on Farmers, 2006).
- CACP: established 1965; attached to Ministry of Agriculture; chaired by a full-time Chairman
- MSP formula: at least 1.5 times A2+FL cost (A2 = actual paid-out costs; FL = imputed family labour)
- Wheat MSP (2025-26): Rs 2,425 per quintal (increased from Rs 2,275 in 2024-25)
- 23 crops covered: 7 cereals, 5 pulses, 7 oilseeds, 4 commercial crops
- Price Stabilisation Fund (PSF): maintained by DFPD to intervene in markets for pulses, onions, potatoes
- FCI is the primary procurement agency for wheat and rice under the Central Pool system
Connection to this news: When domestic wheat prices soften below MSP due to abundant supply, allowing exports is a market-based mechanism to absorb surplus production and maintain farm-gate prices, complementing direct MSP procurement by FCI and state agencies.
Sugar Export Policy and Domestic Sugar Regulations
India's sugar sector is among the most regulated in agriculture. The government controls sugarcane pricing through Fair and Remunerative Price (FRP) determined by CACP (replacing the earlier Statutory Minimum Price system since 2009-10). Sugar exports are regulated through the DGFT notification system, with export quotas allocated by the Department of Food and Public Distribution (DFPD). India is the world's largest sugar consumer and second-largest producer (after Brazil).
- FRP of sugarcane (2025-26): Rs 340 per quintal (for basic recovery rate of 10.25%)
- Sugar production (2025-26 estimate): approximately 320 LMT
- Ethanol Blending Programme (EBP): achieved 20% blending in 2025; diverts approximately 50-60 LMT cane to ethanol
- Sugar export history: India oscillates between being a net exporter and importer depending on production cycles
- Sugar export restrictions: imposed October 2023 to manage diversion to ethanol; now partially relaxed
- National Policy on Biofuels (2018, amended 2022): mandates 20% ethanol blending (E20); target for E27 by 2028
Connection to this news: The approval of 5 LMT additional sugar exports for 2025-26, alongside wheat export relaxation, reflects the government's strategy of balancing domestic food security, farmer income support, and India's growing international trade commitments.
Key Facts & Data
- Wheat export approved: 25 LMT + 5 LMT wheat products (total 30 LMT)
- Sugar export approved: additional 5 LMT for 2025-26 season
- FCI wheat stock projection (April 1, 2026): approximately 182 LMT
- Buffer norm for wheat (April 1): 74.6 LMT (operational + strategic)
- Private wheat stock: approximately 75 LMT (32 LMT higher than previous year)
- Wheat MSP (2025-26): Rs 2,425 per quintal
- India's wheat production (2024-25): approximately 114 million tonnes
- Wheat export ban duration: May 2022 to February 2026 (nearly 4 years)