Bihar launches dedicated investment policy for sugar industry investors
The policy targets 25 new sugar mills and the revival of nine closed plants, with additional incentives for capacity expansion and land support.
INDIA – The Bihar government has introduced a new investment policy offering investors up to Rs 70 crore (US$7.31M) over five years for establishing new sugar mills, as the state seeks to expand its sugarcane processing industry.
Under the Bihar Sugarcane Industry Investment Promotion Policy-2026, investors establishing eligible new sugar mills will receive a direct grant of Rs 14 crore (US$1.46M) annually for five consecutive years. The policy came into force recently and provides a total grant of Rs 70 crore per mill.
State Sugarcane Commissioner Anil Kumar Jha confirmed that the grant will be paid in equal annual instalments, with the first payment released one month after a new mill begins operations.
To qualify for the incentives, a new sugar mill must have a minimum crushing capacity of 3,500 tonnes of sugarcane per day.
Investors establishing mills with capacity above the minimum threshold will receive additional financial support. For every additional 100 tonnes of daily crushing capacity above 3,500 tonnes, the government will provide an extra Rs 2 crore.
The policy also provides land incentives for new sugar mill projects. Investors establishing a mill with a crushing capacity of 5,000 tonnes per day can receive up to 40 acres of land on lease for a token payment of Re 1. Mills with a minimum capacity of 3,500 tonnes per day can receive up to 25 acres under the same terms.
The government will also fully reimburse registration fees and stamp duty on land purchased for establishing new sugar mills.
Existing operational sugar mills will also be eligible for incentives when expanding their capacity. The policy provides Rs 15 crore (US$1.57M) for an expansion of 1,000 tonnes per day, along with an additional Rs 1.5 crore (US$156.62K) for every further 100 tonnes of capacity added.
Jha said Bihar’s policy differs from those in other states because it establishes a dedicated investment framework for the sugarcane industry rather than including the sector under broader industrial policies.
“Every other state in the country has included sugarcane-related incentives in broader industrial policies,” Jha said. “Bihar has created a standalone policy exclusively for the sugarcane industry.”
Jha also said the incentives and land support offered under the policy are more generous than those currently provided by other states.
The Bihar government aims to establish 25 new sugar mills and restart nine closed mills over the next five years. The policy is also expected to generate employment opportunities for one crore youth in the state during the same period.
The initiative forms part of Bihar’s efforts to attract investment into the sugarcane sector, expand processing capacity and support the revival of the state’s sugar industry.
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