India's fabled sweet tooth begins to fade
Sugar consumption is hitting a plateau and is projected to decline as a rising diabetes epidemic and health-conscious younger generations pivot toward natural alternatives. While household demand wanes, the industry is increasingly reliant on food and beverage companies.
From jalebis to rasgullas and gulab jamuns, Indian's appetite for sugar is legendary, with sweets served at everything from weddings to festivals and celebrations of all kinds. However, the taste for sugar is beginning to wane, as a raging diabetes epidemic and a generational shift in dietary habits force a pivot away from the sweetener.
Consumption of sucrose, or table sugar, is expected to rise a mere 1.42% this fiscal year, according to the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), an organization of private sugar mills. According to another industry body, consumption will actually begin to decline in the next fiscal year. The outlook indicates a plateauing in consumption, given that sugar consumption grew at 4.1% annually in the pre-covid years in India, the world’s second-largest sugar producer.
“Sugar demand growth in India is slowing, with domestic consumption expected to increase only marginally to around 28.5 million tonnes in 2025–26 from 28.1 million tonnes in 2024–25. This subdued growth reflects changing dietary preferences, rising health consciousness, and increasing substitution towards alternative sweeteners and processed foods with lower sugar intensity," said Deepak Ballani, director general, ISMA. The estimate for FY26 is sharply below the FY24 consumption of 29 mt.
The development assumes significance for the nation with the world’s second-highest diabetes burden of 100 million after China, and another 136 million in the pre-diabetes stage. A high sugar intake is associated with type-2 diabetes, cardiovascular disease, obesity and other metabolic health risks.
Until the covid-19 pandemic, sugar consumption grew at an annual rate of about 4.1%, said Prakash P. Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd, the apex body representing cooperative sugar mills across India. "In the post-pandemic period, growth slowed significantly to around 2.1%. Over the past few years, consumption has largely stagnated, indicating that sugar demand has now reached a plateau. Sugar consumption is likely to be around 28.5 million tonnes in 2025-26, after which it could begin to decline, as consumers shift to alternatives such as stevia," Naiknavare added.
Many sugar-conscious consumers turn to natural sources of sweetness such as jaggery, dates and fruit-derived sugars, which are considered healthier options.
While declining demand does not bode well for sugarcane farmers and mills, healthcare professionals welcome the development, attributing it to rising health awareness.
“The younger population is more fitness-conscious now and monitors its sugar intake. Having said that, people are using alternatives to sugar, including artificial sweeteners. However, artificial sweeteners, when consumed in excess, can have harmful effects and have been linked to cancer in certain situations," said Dr. Niranjan Hiremath, senior consultant in cardiovascular and aortic surgery at Apollo Hospital, Bangalore.
From a public health perspective, the development is positive and necessary, said Dr. Monashis Sahu, a Delhi-based endocrinologist.
"Rising awareness about diabetes, obesity and metabolic disorders is pushing consumers to cut back on added sugars and seek healthier alternatives. This shift is likely to continue, especially as preventive healthcare and nutrition literacy improve, reinforcing structurally lower growth in per capita sugar consumption," added Sahu.
Meanwhile, India's sugar output for the 2025-26 season is projected to increase by nearly a fifth to 30.95 mt, reflecting improved sugarcane yields and recovery on account of favourable rainfall and adequate reservoir levels, as compared to 26.1 mt production in 2024–25. Total sugarcane acreage for the 2025-26 sugar season is estimated at around 5.73 million hectares, compared to 5.71 million hectares in 2024-25.
Changing diets and rising health consciousness has contributed, agreed Pramod Patwari, chief financial officer at Balrampur Chini Mills Ltd, one of the largest sugar producers in the country. "While household consumption has declined, sugar is increasingly consumed indirectly through sweets, bakery products and other food items, especially during social gatherings and eating out. However, this has not translated into a proportionate increase in overall sugar consumption," Patwari said.
“At the same time, exports have slowed as Indian sugar prices are no longer competitive compared with Brazilian sugar, affecting shipments to our traditional overseas markets. The government should revisit and restore the policy framework introduced in 2018 for ethanol production to help balance domestic supply, support the industry and enhance farmers’ incomes," Patwari said over the phone.
The policy framework referred to the National Policy on Biofuels (NPB) 2018, under which sugar diversion towards ethanol was encouraged at prices linked to the Fair and Remunerative Price (FRP) of sugarcane.
Patwari added that over the last three years, FRP has increased by about 16.5%, but there has been no corresponding increase in the ethanol procurement price. This mismatch could make ethanol production unviable, lead to surplus sugar output, impacting mills’ cash flows and delaying farmers' payments, he said.
Analysts expect sugar demand growth to be supported by institutional consumption; with the faster expansion of food services, quick-service restaurants (QSRs) and packaged beverages expected to drive the bulk of incremental demand, reinforcing institutional sales as the dominant driver of sugar consumption in the years ahead.
Currently, institutional consumption, including food and beverage companies, hotels, restaurants and catering (HoReCa), and processed foods accounts for 65% of total sugar demand, with the households accounting for the remaining share.
According to Poonam Upadhyay, director, Crisil Ratings, momentum in India’s sugar consumption will continue to be driven by institutional demand, with food and beverage companies playing a key role in shaping the industry’s growth trajectory, while normal festive demand will help keep household consumption steady.
“In contrast, household demand remains steady but is not expected to grow significantly. However, there is a trend towards wider adoption of branded sugar among mid-income urban and semi-urban consumers, while more affluent consumers are becoming increasingly health-conscious," Upadhyay added.
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