From Draft to Final Order
By Dilip Patil
A close examination of the Sugar (Control) Order, 2024 (Draft) and the finalized Sugar (Control) Order, 2025 reveals a process of refinement and strategic enhancement, addressing crucial aspects of the sugar industry from definitions to enforcement. The transition highlights the government’s evolving approach towards regulation, particularly concerning ethanol production, quality standards, and digital integration.
1. Short Title, Extent, and Commencement: Pinpointing the Start Date
* 2024 Draft: Simply stated the order would come into force “at once.”
* 2025 Final: Specifies a more precise commencement: “on the date of its publication in the Official Gazette.”
Change: This seemingly minor adjustment provides legal clarity and ensures a defined starting point for the implementation of the new regulations, moving away from the ambiguity of “at once.”
2. Definitions: Sharpening the Language of Regulation
* 2025 Order’s Expanded Lexicon: The final order significantly broadens the scope of definitions, introducing several new terms and refining existing ones:
* Bulk Consumer: The threshold for classification as a bulk consumer has been substantially increased from ≥30 MT/month in the draft to ≥100 MT/month in the final order.
* Bura Sugar: Gains a specific definition, including precise limits for sucrose content (≥90%) and moisture (≤0.7%).
* By-products: The definition is expanded to explicitly include not only traditional by-products like cane bagasse, molasses, and press mud but also “alternative products,” suggesting a forward-looking approach.
* Ethanol: The final order clarifies that ethanol, within the context of this order, refers to the product derived from sugar-based feedstocks, specifically mentioning cane juice, syrup, and molasses.
* Food Business/Food Business Operator: These terms are now explicitly aligned with the definitions provided under the Food Safety and Standards Authority of India (FSSAI) regulations.
* Quality Standards: References to quality standards have been meticulously updated to align with the FSSAI Regulations, 2011, providing specific benchmarks for various sugar types like icing sugar and khandsari sugar.
* Refined Definitions: Existing definitions have also undergone revision:
* Khandsari Sugar: The final order categorizes khandsari sugar into two distinct varieties – Desi and Sulphur – and imposes stricter purity standards, for example, setting a minimum sucrose content of ≥93% for Desi khandsari.
* Molasses: The subtypes of molasses (A-Heavy, B, C-Heavy) are now redefined with specific purity ranges, such as a minimum purity level of ≥66% for A-Heavy molasses.
Change: The 2025 Order demonstrates a clear intent to harmonize its definitions with existing FSSAI standards, ensuring consistency across regulatory frameworks. The added granularity for by-products and sugar types reflects the increasing complexity and diversification of the sugar industry, including the growing importance of ethanol production.
3. Power to Regulate Production: Explicitly Addressing Ethanol Diversion
* 2024 Draft: Granted Central and State Governments the authority to require licenses for the production of sugar and its by-products.
* 2025 Final: Retains the licensing power but crucially adds the regulation of the diversion of sugar for the production of ethanol and other products under a new sub-clause (Clause 5(2)). Furthermore, compliance with the Industrial Entrepreneur Memorandum (IEM) is now explicitly mandated.
Change: The final order’s explicit inclusion of ethanol production and the control over sugar diversion marks a significant policy shift, directly reflecting the government’s strong push towards biofuel blending and energy independence. The IEM requirement adds a layer of oversight and planning to the production process.
4. Power to Restrict Sale/Storage: Introducing Flexibility for Seized Stock
* 2024 Draft: Empowered the Central Government to issue directives to producers and dealers regarding the sale and disposal of sugar.
* 2025 Final: While retaining this power, the final order introduces a new provision (Clause 8) allowing for the release of seized sugar for sale upon the submission of a bank guarantee.
Change: This addition provides a mechanism for the disposal of seized stock that balances regulatory control with the practical need to avoid prolonged impoundment and potential loss of value.
5. Price Regulation: Formalizing Minimum Pricing and Broadening Scope
* 2024 Draft: Stated that the Central Government would consider the Fair and Remunerative Price (FRP), conversion costs, and by-product revenue when regulating prices.
* 2025 Final: Formalizes the concept of a Minimum Selling Price (MSP) in a dedicated clause (Clause 9). Additionally, it specifies “primary by-products” – explicitly mentioning molasses, bagasse, and press mud – as key components to be considered when determining the MSP.
Change: The explicit introduction of a legally defined Minimum Selling Price provides a more structured framework for ensuring the financial viability of sugar producers. The broadening of the scope of by-product revenue considered in price determination acknowledges the economic significance of these co-products.
6. Movement Regulation: Streamlining Language
* Both the draft and final orders require permits for the transportation of sugar. The 2025 Order maintains the exemption for military credit notes but presents the language in a slightly more concise manner.
Change: Primarily a stylistic refinement without significant alteration to the core regulatory principle.
7. Quality Control: Delegating Oversight to the Experts
* 2025 Order: Significantly clarifies the responsibility for quality regulation by explicitly assigning this role to the Food Safety and Standards Authority of India (FSSAI) under Clause 11(3). Furthermore, it mandates that producers must either reprocess substandard sugar to meet the prescribed standards or restrict its sale to bulk consumers only.
Change: This delegation of quality oversight to the FSSAI aims to streamline regulatory responsibilities and leverage the expertise of the apex food safety body, reducing potential overlaps and ensuring a more unified approach to quality standards in the sugar industry.
8. Inspection and Enforcement: Modernizing Legal and Procedural Frameworks
* 2025 Order: Updates the procedural aspects of inspection and enforcement. The sampling procedure is now explicitly aligned with IS 14818:2017 and FSSAI Rules (Clause 14), ensuring adherence to recognized standards. Crucially, references to the outdated Criminal Procedure Code (CrPC) have been replaced with the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS 2023), reflecting the modernization of India’s criminal justice system for search and seizure procedures.
Change: These amendments reflect an effort to modernize the legal and procedural basis for inspection and enforcement, aligning with current legal frameworks and established quality control protocols.
9. Data Sharing and Compliance: Prioritizing Digital Integration and Data Privacy
* 2025 Order (Clause 12): Emphasizes digital compliance by mandating reporting through Application Programming Interfaces (APIs). It also includes a crucial provision explicitly prohibiting the sharing of this data with third parties, restricting its use strictly to government purposes, thereby addressing data privacy concerns.
Change: This clause underscores the government’s push towards digital integration within the sugar industry, aiming for more efficient data collection and analysis. The explicit data privacy safeguards are a significant addition in the final order.
10. Delegation of Powers: Simplifying the Clause
* Both the draft and final orders permit the delegation of powers to Central and State authorities. The 2025 Order presents this clause in a more streamlined and concise manner.
Change: Primarily a textual simplification without altering the fundamental principle of delegation.
Takeaways from the Draft to Final Order Evolution:
* Stricter and Harmonized Definitions: The final order demonstrates a clear commitment to aligning with existing FSSAI standards and providing greater clarity in the definition of key terms, including ethanol and various sugar by-products.
* Explicit Ethanol Diversion Control: Recognizing the strategic importance of biofuels, the 2025 Order explicitly regulates the diversion of sugar for ethanol production, a significant addition absent in the draft.
* Formalized Minimum Pricing: The introduction of a formal Minimum Selling Price mechanism in the final order provides a more structured approach to price regulation.
* Integration with FSSAI: The delegation of quality control responsibilities to the FSSAI signifies a move towards reducing regulatory overlaps and leveraging specialized expertise.
* Modernized Enforcement Framework: The final order updates legal references to the BNSS 2023 and aligns sampling procedures with recognized industry standards, indicating a commitment to modernizing enforcement mechanisms.
* Enhanced Digital Integration and Data Privacy: The mandate for digital reporting via APIs, coupled with explicit data privacy provisions, reflects a move towards leveraging technology while safeguarding data. The
