Sugar Industry in India | Location, History, Problems, Positions, Mahajan Committee

Explore the Sugar Industry in India

This write-up will take you through the complete details of the sugar industry in India.

For a holistic and better understanding of the topic, we have included several elements related to it.

Explore the sugar industry, its history, significance, and problems. Also, know about the size and number of sugar industries in India and also some facts and figures of the same.

Get along and obtain an in-depth understanding and authentic information on the topics.

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Where is the sugar industry located in India?

Until 1960, the leading sugar producers in India were Bihar and Uttar Pradesh. Moreover, the sugar industry is the second largest agro-based industry in India after the Cotton Industry.

Sugarcane field

The geographical distribution of the sugar industry in India is as follows:-

Uttar Pradesh

It is the leading sugar producer in India and has the most sugar industries in the country.

The major centers of sugar production are Gorakhpur, Basti, Deoria, Meerut, Gonda, Saharanpur, Bijnor, Muzaffarnagar, and Moradabad.


Bihar has favorable climatic conditions for sugar production. However, there is a lack of modernized plants and equipment and support of the government.

Out of the 28 sugar mills present, only 9 of them are operating. The major centers are Samastipur, Gopalganj, Sitamarhi, Champaran, and more.


Out of 24 sugar mills in Punjab, 16 are in the co-operative sector and 18 in private sectors.

The major centres of production are Phagwara and Dhuri.


The private sugar mills in Haryana crush approximately 2.6 crore quintals and the Cooperative Sugar mills crush over 3 Crore quintals per year.

The major centres are Ambala Rohtak and Panipat.


Maharashtra has been contributing to around 40% of the total sugar production in India.

The major centers are in Nashik, Pune, Sangli, Kolhapur, Satara, and Solapur.


Karnataka has 41 sugar factories distributed all over the state. The major centres are Munirabad, Mandya and Shimoga.

Tamil Nadu

10% of the total sugar production in India comes from Tamil Nadu. The state has 41 Sugar Mills with 16 in co-operative Sector, 3 in the public sector and 22 in the private sector.

The major centres Pugulur, Nalikupuram and Coimbatore.

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What is the history of the sugar industry in India?

History of Sugar Industry in India

Acknowledged as the original home of sugarcane cultivation and manufacture, certain legends depict the origin of sugarcane in India.

The growth of the sugar industry in India is full of adventures and conquests.

Around 800 B.C, China took sugarcane as the soil conditions there were ideal for its development.

Also, the Greek invasion under Alexander the Great marked the entry and introduction of sugarcane to Europe.

Manufacture of sugar in India was initially carried out through a simple process of crushing cane by a heavyweight and boiling the juice in containers and stirring until it forms solids. It was done between the fourth and the sixth century.

The uneven shapes and sizes of solids were called “Sarkara“. The word is a Sanskrit term which means travel and the modern world “sugar” is a derivative of Sarkara only. The larger pieces of solids were termed as Khand.

With the advent of several sugar mills in Bihar and UP in the 1920s, the modern sugar processing industry began which used a direct vacuum pan method.

The Indian legislature passed the Sugar Industry Protection Act in 1932. With the adoption of the policy of discrimination protection by the government of India in 1952, the Indian industry gained momentum.

The Act was granted to the indigenous sugar industry for 14 years, which ended on 1st March 1946.

The number of sugar mills rose to 130 in 1935-36 which was 32 in 1931-32. In four years India became a self-sufficient sugar producer.

During the war and post-war years, there was a slight fluctuation in trends owing to the instability in cane supply.

After the commencement of the Plan Era after independence, the industry made steady progress. There was an upward trend in the production of sugarcane.

However, in the first two years of ‘Plan Holiday’ between 1966 to 1969, there was dissatisfactory performance due to the under cultivation of sugarcane owing to the unfavourable weather conditions.

By the end of 1976-77, the production rose to 48.4 lakh tonnes leaving a considerable surplus of 10.9 lakh tonnes.

This was due to the consumption being only 37.5 lakh tonnes. This placed India in the fifth position among the sugar-producing countries in the world next to USSR, Brazil, the USA, and Cuba.

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What are the problems of the sugar industry in India?

The sugar industry in India has several serious and complicated problems which demand immediate attention and solutions.

We have briefly described some of the problems as given below:-

  • Although India has the largest area under sugarcane cultivation in the world, it has an extremely low yield per hectare. The low yield is compared to Hawaii, Peru, Rhodesia, and Java.
  • The utilization of one-third of sugarcane production for making gur and Khansari causes the shortage of raw material for the sugar mills.
  • The seasonal character of the sugar industry causes the workers to remain ideal for almost half of the year creating financial issues.
  • There is a low average recovery rate of sugar which is 10% from sugarcane when compared to other sugar-producing areas which are 14%.
  • Most of the sugar mills in the country are not viable due to their small size and crushing capacity of 1200 tons per day.
  • Majority of sugar mills in Bihar and Uttar Pradesh are over 50 years old and working with old and outdated machinery. This result in low production and less amount of profit-making the unit.
  • The sugar industry has bagasse and molasses as by-products. There is a problem in disposing of these under pollution control devices in the industry.
  • Due to high sugarcane costs, inefficient technology, high taxes, and economic production, the cost of sugar production in India is one of the highest in the world.

What is the position of the Indian sugar industry?

The sugar industry holds great relevance for the economy of India by saving huge amounts of foreign exchange by not importing sugar from foreign countries.

Also, it earns foreign exchange which stands as an essential requirement for the development of the country.

In India, the sugar industry occupies second place amongst the largest industries after the Cotton Industry.

In 1956-57, India entered the world market as an exporter and sold nearly 1.53 lakh tonnes of sugar. This resulted in earning around 12 crores of foreign exchange.

The top buyers as per the ‘Indian Sugar Mills Association’ in descending order are China, East Africa, Malaya, Sudan, Iraq, Burma, Ceylon, Aden, Singapore and the United Kingdom.

China imported 33,624 tonnes of sugar while the United Kingdom imported 1,002 tonnes of sugar.

What is the Mahajan Committee?

The Government of India set up a High Powered Committee on 14th March 1997 intending to study the development and growth of the sugar industry in India alongside other sugar-producing countries.

It was done in pursuance with the judgment of Allahabad High Court delivered on 11.12.1996.

The committee was set up to suggest modification, amendments for the repeal of any existing laws and control to increase the production efficiency.

The chairman of the committee was Shri B.B. Mahajan, Former Food Secretary, who submitted his report to the Government of India on 15.04.1998.

What are the recommendations of the Mahajan Committee?

The report consisted of the foremost conclusion and recommendations of the committee which are as follows:

Cane Reservation Area

An area of 25 kilometres should be the reservation zone for cane and it should be permanent.

Licensing Policy

The committee suggested continuing the existing licensing policy with certain modifications.

Price Control and Price Distribution System

Complete control of sugar for over two years was recommended by the committee. The percentage of levy sugar was reduced to 20% which may continue at the same rate during the next sugar season.

Pricing of Sugar

Even under the system of complete control of sugar prices as a guarantee of a minimum price to the growers, the announcement of the statutory minimum price will need to be continued.

Research and Development and Modernization

The State Governments have to issue directions to the mills for payment of cane prices by crossed cheques. NSI Kanpur was turned into an autonomous organisation as a registered society.

Mainly concentrating on research and cane processing was to be done by the proposed National Institute of Sugarcane and Sugar Technology.

Sugar Cycle

To reduce the fluctuation extent in sugar production, the sugarcane producers may be required to get the area intended to be planted with cane registered with the factory prior to the plantation.

Buffer Stock

To minimize the fluctuation in sugar price, maintenance of buffer stock on a regular basis was made necessary.


To ensure the promotion of new units, timely loan and prevention of cost overruns due to delay in loan sanction and disbursement must be tackled.

The state governments must ensure that the co-operative units are managed on sound lines and honor their guarantee.

What is the size of the sugar industry in India?

Annually, the sugar industry produces approximately 300-350 million tonnes of cane, 20-22 million tonnes of white sugar and 6-8 million tonnes of jaggery and Khandsari to meet the domestic consumption demand sweeteners.

How many sugar industries are there in India?

As of 31.03.2003, there are 551 established sugar factories out if which 453 sugar mills are operating.

Which is the first sugar mill in India?

The first sugar mill was set up in Uttar Pradesh in 1903.

What is India’s rank in sugar production in the world?

India is ranked 2nd in the world for sugar production after Brazil.

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