Bihar becomes first state in India to launch dedicated investment policy for sugar industry
Bihar has announced a ₹14 crore annual grant for five years to new sugar mills, totaling ₹70 crore per mill. The policy also offers land support, expansion incentives and targets 25 new mills and nine mill revivals within five years.
Patna: 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 14 crore per year for five consecutive years to investors who set up new sugar mills in the state, taking the total payout to Rs 70 crore 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, The Times of India reported.
State Sugarcane Commissioner Anil Kumar Jha confirmed to media that the grant will be disbursed in equal annual instalments of Rs 14 crore, 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 2 crore, 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 15 crore for a capacity expansion of 1,000 tonnes per day, with an additional Rs 1.5 crore offered for every further 100 tonnes of expansion beyond that.
What sets this policy apart from those of other states, according to Jha, is that Bihar has created a standalone investment promotion framework exclusively for the sugarcane industry. Every other state in the country, he said, folds sugarcane-related incentives into broader industrial policies. Bihar’s decision to carve out a separate policy for this sector is being seen as a strong signal of the state government’s intent to revive and grow its sugar industry. Jha also said that the incentives and land support on offer in Bihar are more generous than what any other state currently provides.
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.
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Source : ChiniMandi
