Bihar became the first Indian state to launch dedicated investment policy for sugar industry

In what is being described as a first-of-its-kind initiative in the country, the Bihar government has announced a direct grant of Rs 140 million (USD 1.5 million) per year for five consecutive years to investors who set up new sugar mills in the state, taking the total payout to Rs 700 million (USD 7.3 million) per mill over five years. The move is part of the newly launched Bihar Sugarcane Industry Investment Promotion Policy-2026, which came into force just a few days ago.

State Sugarcane Commissioner Anil Kumar Jha confirmed to media that the grant will be disbursed in equal annual instalments of Rs 140 million, with the first instalment released just one month after the new mill begins operations. To be eligible, a new sugar mill must have a minimum crushing capacity of 3,500 tonnes per day.

Investors looking to go beyond the base capacity will find additional incentives waiting. For every extra 100 tonnes of crushing capacity added above the 3,500 tonne threshold, the government will provide an additional Rs 20 million, making larger investments progressively more attractive.

The policy also addresses one of the most significant challenges for new industrial projects – land. The government has linked land support directly to the size of the plant. An investor setting up a mill with a capacity of 5,000 tonnes per day will be eligible for up to 40 acres of land on lease at a token payment of just Re 1. For a mill at the minimum capacity of 3,500 tonnes per day, up to 25 acres will be made available on the same terms. On top of this, the policy provides full reimbursement of registration fees and stamp duty on land purchased for setting up new sugar mills.

The policy does not stop at new investments. Existing and operational sugar mills looking to expand their capacity will also benefit. The government will provide Rs 150 million for a capacity expansion of 1,000 tonnes per day, with an additional Rs 15 million offered for every further 100 tonnes of expansion beyond that.

The government has set an ambitious target behind this policy – to establish 25 new sugar mills across Bihar and restart nine mills that have been shut down, all within the next five years. The policy is also expected to generate employment for one crore youth in the state during the same period.

With this move, Bihar is positioning itself as a destination of choice for sugar sector investments at a time when the industry is seeing fresh attention across the country.

More details: https://www.chinimandi.com/bihar-becomes-first-state-in-india-to-launch-dedicated-investment-policy-for-sugar-industry/