Smuggling Patterns Under Export Restrictions

Since June 2023, India has banned the commercial export of sugar. However, from October 2023 to the present, approximately 500,000 tonnes of sugar have been illicitly exported. The government permitted the export of 6.1 million tonnes of sugar in the 2022-23 marketing season, with a final shipment date of May 31, 2023. Despite the absence of new export quotas, smuggling remains prevalent.

Nepal and Bangladesh: Primary Destinations for Illicit Sugar

Most smuggled sugar has ended up in Nepal and Bangladesh, countries sharing borders with India. Large-scale smuggling was notably high between February and April 2024, but the pace has since slowed. Nevertheless, total smuggling could reach 700,000 tonnes by the end of the marketing season in September 2024. Traders in both Bangladesh and Nepal prefer smuggled sugar. Although smuggling activities have decreased since April, they have not ceased entirely.

Enhanced border security measures have made it harder for smugglers to transport sugar. Smuggling activities slowed during May and June, with expectations of a resurgence in July due to monsoon conditions. However, recent reports indicate that no significant consignments of smuggled sugar have been intercepted, highlighting the success of increased security measures.

Expected Rise in Smuggling and Government Countermeasures

Despite ongoing challenges, total sugar smuggling is expected to reach 700,000 tonnes by the end of the marketing season. The government's intensified border security has significantly hampered smuggling activities. Nevertheless, continuous monitoring and stricter measures are essential to combat this illegal trade. This situation emphasizes the need for robust enforcement to prevent further smuggling and protect the domestic market.

In conclusion, sugar smuggling persists despite the export ban, with significant quantities reaching Nepal and Bangladesh. Enhanced border security has reduced smuggling rates, but sustained efforts are necessary to address this issue effectively. The government's ongoing commitment to border security will be crucial in preventing further illegal sugar exports.