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Informist, Wednesday, Aug. 5, 2026

 

NEW DELHI – The Bombay High Court has upheld the government's decision to ban exports of raw, white, and refined sugar with immediate effect until Sept. 30, observing that it was not a knee-jerk reaction but a well-thought-out policy decision taken in the interests of the domestic sugar market.

 

The court said Premium Sugars, Rika Global Impex Ltd. and other exporters could sell the sugar with them in the domestic market. Such measures, if taken, would be in accordance with the governing laws, including the Sugar Control Orders, as applicable, subject to the petitioners complying with the legal requirements in this regard, it said.

 

The court said legitimate expectation is not an enforceable right, particularly in the context of a reasoned policy decision. "The only exception, in our view, to warrant interference would be when such decision suffers from the vice of arbitrariness.... We do not find such exception to be applicable in the cases before us," it said.

 

The bench of Justice Advait M. Sethna and Justice Suman Shyam said this is a case where legitimate expectation, as argued by the petitioners, cannot be placed higher than the interests of producers and consumers of sugar as far as the domestic industry is concerned. Protecting their interests at this moment appears to be the need of the hour, it said. The government being the competent authority acting under the relevant statutes is clothed with the expertise and wherewithal to take an informed decision, it added. "...Interference by this court, in exercise of its extraordinary jurisdiction, would not be conducive, in the given factual complexion," it said.

 

The bench said it had noted the projection of the petitioners that they would be at risk of being driven into commercial arbitration at the behest of private parties or overseas buyers. "However, our judgment would always be guided by law and the applicable legal principles and not futuristic anticipation of the petitioners," it said. "We cannot countenance an approach where private commercial interests and the hardships faced, if any, will undermine policy decisions taken in accordance with law, guided by the supervening public and national interest."

 

According to the notification, the fresh prohibition does not apply to sugar exports to the European Union and the US under the commercial export licence and tariff rate quota concessions. Traders can export sugar at a relatively low or zero customs duty by availing the commercial export licence concession on exports to the EU. Under the tariff rate quota, imports of a specified quantity of a product at lower or zero customs duty are permitted in the US. Exports of sugar will also be permitted if the loading of the consignment on ships had begun before the notification was published, or if the shipping bill was filed and the ship was berthed or had arrived and anchored in an Indian port, with its rotation number allocated by the port authority concerned.

 

The current ban is a reversal of the previously "restricted" export policy under which the government had, Nov. 14, approved 1.5 million tonnes of sugar for export in the year 2025-26 (Oct-Sept). Thereafter, it approved a further 500,000 tonnes for export on Feb. 13, taking the total quantity approved for export to 2 million tonnes. Prior to Nov. 14, sugar exports were prohibited.

 

The petitioners said the sudden change in policy, altering the export status of sugar from "restricted" to "prohibited", was unfair, unjust, arbitrary, and unreasonable, and warranted the court's interference. They said they had entered into contracts with private parties and also received payments, in the legitimate expectation that they would be able to export sugar in accordance with the terms and conditions stipulated in the previous notifications.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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