The proposed restriction comes as India enters a new sugar season with lower opening stocks and concerns over production in major sugarcane-growing states.
The confectionery maker will retain its existing Neuss facility and focus on modernising its German manufacturing network after shelving plans for a new plant.
Brazilian sugar producers face reduced preferential access to the US market, with northeastern mills expected to seek alternative export destinations.
The investment adds a flexible moulding line for KitKat and Aero, while Nestlé faces separate FSSAI adjudication cases involving infant nutrition products in India.
Growers are seeking higher cane prices, ethanol production opportunities, loan waivers and reliable power as drought and rising costs put pressure on Karnataka’s sugar sector.