The Indian government is finalising a comprehensive overhaul of the sugar sector's regulations to promote ethanol production and give more powers to states.
The food ministry's draft Sugarcane (Control) Order, 2026 proposes increasing the mandatory distance between two sugar mills from 15 km to 25 km to prevent mills from sourcing cane outside designated zones.
Major producers such as Uttar Pradesh and Karnataka currently do not follow the 25-km norm, but Maharashtra, Punjab, and Haryana already adhere to it.
The draft also brings ethanol production within the sector's regulatory ambit, treating units producing ethanol from molasses as part of the sugar industry.
Industry representatives have welcomed the changes, which include new approval processes, enforcement of millers' distance rules, and raising performance bank guarantees to ₹2 crore.
The reforms mark the most significant reset since 2012, when the UPA government scrapped the levy sugar system based on recommendations by economist C Rangarajan.
