Govt mandates digital reporting for sugar mills, regulates khandsari units

The government has mandated sugar mills to digitally report production and sales, ending manual submissions, and brought larger khandsari units under its regulatory umbrella, in a bid for transparency and better farmer pay, a new order said Thursday.

Under the new Sugar (Control) Order, 2025, the government has brought khandsari units with a crushing capacity above 500 tonnes per day (500 TCD) under regulatory oversight for the first time. The shift to digital reporting is expected to improve transparency, enhance efficiency, reduce data leakages, and enable real-time monitoring of sugar production and movement.

Also Read | Dairy, whey, and sugar overload: Are they behind your acne?

Bringing khandsari units under regulation will also help ensure that farmers supplying to these units receive the government-fixed Fair and Remunerative Price (FRP) for sugarcane.

Khandsari units are traditional, small-scale sugar processing units that make unrefined sugar from sugarcane using simple machinery.

The central government has brought amendments to the near six-decade-old Sugar (Control) Order, 1966, to bring transparency, efficiency and accountability to the sugar ecosystem.

Also Read | A sugar-coated catastrophe: Groundwater crisis in Uttar Pradesh

"The objective of the Sugar (Control) Order, 2025 is a step toward building a more efficient, transparent, and accountable sugar ecosystem, fostering both domestic stability and global competitiveness," said Sanjeev Chopra, secretary, department of food and public distribution in the ministry of consumer affairs, food and public distribution.

According to the order, the mills have to share the information pertaining to production and sales in digital forms with the government. The integration of systems will enhance efficiency, provide real-time data, reduce data leakages and redundancies. The process is already going on and more than 450 sugar mills are already integrated with the Department of Food and Public Distribution (DFPD) portal. Further, GSTN (goods and services tax network) data related to sale of sugar by sugar mills are also integrated with the portal.

Also Read | Mutual funds develop a sweet tooth, more than double sugar stock purchases

"This revision aims to simplify and streamline the regulatory framework governing the sugar sector in line with current industry dynamics and technological advancements," Chopra said.

Also, khandsari sugar makers with 500 TCD will now be regulated under the Sugar Control Order to ensure payment of fair and remunerative prices to cane farmers and help in accurate estimation of sugar production. Currently unregulated, the khandsari sugar industry has seen rising production.

Nationally, there are 373 khandsari units (with total capacity of about 95,000 TCD) working in the country. Out of the total, 66 units have more than 500 TCD capacity. The total capacity of these units is about 55,200 TCD.

"The amended order will be notified either today or tomorrow in the gazette," he added.

The ministry has also included raw sugar in the amended control order to prevent it from being marketed under misleading names like khandsari or organic sugar.

"This will help the government to regulate the diversion of sugar to ensure sufficient availability for domestic consumption," the secretary said.

Indian Sugar and Bio-Energy Manufacturers Association (ISMA) estimates that total sugar production in the country will be 26.4 million tonnes in 2024-25, less than the 31.99 million tonnes produced in 2023-24. Notably, around 3.5 million tonnes of sugar is expected to be diverted towards ethanol production this year, against last year's diversion of 2.15 million tonnes. Despite the dip in production, ISMA affirmed the stable and sufficient availability of sugar across the country for the ongoing 2024-25 Sugar Season, dispelling any concerns about potential shortages and supply constraints.

On procurement of wheat

The Secretary said that purchases of wheat during the Rabi marketing season 2025-26 is going on smoothly in the major procuring states across the country. Against an estimated target of 31.2 million tonnes fixed for procurement of wheat during 2025-26 season, 25.63 million tonnes of wheat has already been procured so far. The quantity of wheat procured till 30 April this year has already surpassed last year’s total procurement of 20.54 million tonnes on the same date, showing an increase of 24.78 %.

On smart warehousing

Chopra said that the department of food and public distribution is now working on smart storage solutions by integrating smart warehousing technologies by creating a seamless digital monitoring ecosystem that includes CCTV surveillance and IoT (Internet of Things) sensors, monitoring key parameters such as CO₂ & Phosphine levels, fire hazards, humidity, unauthorized entry and temperature in real time, ensuring security and efficiency in food grain storage. Already, seven warehouses of the Central Warehousing Corporation have been made smart. The government intends to convert 226 warehouse into smart warehouses by November this year.

Further, a total of around 2,278 warehouses, including those owned by Food Corp. of India and Central Warehousing Corporation, and those hired from state agencies and private operators will be onboarded in this digital initiative.