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CRISIL SME Tracker: Sugar MSMEs set for steady growth amid diversification

The government's Financial Assistance to Sugar Mills for Enhancement and Augmentation of Ethanol Production Capacity has prompted MSME sugar players to diversify into distilleries

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Higher sugar exports and ethanol diversification are set to lift industry revenues in 2025-26, even as mills push for a long-pending hike in sugar MSP.

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The sugar industry is poised to witness a revenue growth of ₹3 per cent in the ongoing sugar season 2025-26 (October 2025 - September 2026), driven by the government’s decision to allow incr-eased sugar exports of 1.5 million tonnes (mts). This move, coupled with no restrictions on diverting cane to ethanol production, is expected to keep sugar prices firm, with a potential increase of around 1 per cent. Despite a surge in sugar output, inventory levels are expected to remain comparable to the previous season, at around 5 mt.
 
The government’s Financial Assistance to Sugar Mills for Enhancement and Augmentation