ISMA Pushes for Regulation, Faces Opposition

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) urged the Food Ministry to regulate khandsari (raw and unrefined) sugar production. In a letter to Food Secretary Sanjeev Chopra, ISMA expressed concerns over the rapid growth of khandsari units, especially in Uttar Pradesh and Maharashtra. Crushing capacities have reportedly reached 2,000 tonnes per day. ISMA argued that the unchecked expansion of these units has led to unhealthy competition, affecting the organized sugar sector. They proposed stricter rules for new khandsari units. Limiting their establishment outside sugar mills' catchment areas and tightening controls on production and exports. However, some feel the regulations might be too restrictive.

BHAKTI Defends Khandsari’s Traditional Role

The Bharatiya Heritage Association of Khandsari and Traditional Sweeteners Industry (BHAKTI) strongly opposed ISMA’s suggestions. BHAKTI Director-General Shashikant Pandhare pointed out that khandsari has existed since the Vedic era and remains a key ingredient in Ayurvedic medicine. He emphasized that khandsari is more nutritious than refined sugar, providing essential nutrients like calcium, magnesium, potassium, and iron. Pandhare rejected ISMA’s claim that khandsari units avoid paying taxes, clarifying that they only benefit from a 5% GST exemption. It's important to note that many are unaware of these health benefits.

Pandhare highlighted the significant government support the sugar industry receives. He noted that sugar producers have benefited from thousands of crores in incentives and the Sugar Development Fund, while khandsari producers haven’t received similar financial aid.

Khandsari Units Operate Under State Control

Addressing ISMA’s claim that khandsari units take sugarcane from reserved catchment areas, Pandhare clarified that these units operate under state-issued licenses. They are authorized to source sugarcane based on an annual allocation. Responding to ISMA’s assertion that khandsari units crush 12 million tonnes of sugarcane and work for only 160 days, Pandhare cited a previous ISMA study, which found that khandsari units typically operate for 100-120 days. BHAKTI data shows that khandsari units currently crush only 4 million tonnes. When compared to the 320 million tonnes crushed by sugar mills. This is crucial information to aware of these discrepancies.

Pandhare opposed ISMA’s request to ban khandsari exports. Arguing that ISMA itself seeks permission to export 2 million tonnes of sugar while attempting to restrict khandsari’s legally allowed exports.

Khandsari Exports and Ease of Business

Pandhare noted that khandsari exports from October 2023 to June 2024 totaled just 0.20 million tonnes, a small fraction of sugar exports. He warned that restricting khandsari exports would harm the Indian diaspora, who depend on these heritage products. He also refuted ISMA’s claim that large khandsari units with 2,000 tonnes per day capacity are being established, stating that only 50 of the 272 khandsari units can crush over 500 tonnes daily. These units are already regulated by state laws, making further central control unnecessary. I wonder why ISMA would push for such restrictions.

Pandhare emphasized that imposing central regulations on khandsari would conflict with the government's goal of improving ease of doing business. While BHAKTI supports ISMA’s push for sugar exports, Pandhare urged the government not to be influenced by ISMA’s "false narrative" regarding khandsari.

Conclusion: Finding a Balance for Khandsari and Sugar Exports

The debate over khandsari regulation presents challenges in balancing traditional practices with industry growth. As ISMA calls for stricter controls, BHAKTI advocates for preserving khandsari’s heritage and export rights. Policymakers will need to carefully weigh both sides to promote fair competition and protect India’s traditional sweeteners industry.





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