Union Minister for Road Transport and Highways Nitin Gadkari has urged cooperative sugar mills to reduce their dependence on sugar production and diversify into value-added by-products such as compressed biogas (CBG), ethanol, bio-manure and other energy products. Speaking at the National Efficiency Awards ceremony organised by the National Federation of Cooperative Sugar Factories (NFCSF) in New Delhi on September 22, Gadkari said standalone sugar production is becoming economically challenging because Indian sugar costs are higher than those of major global producers and domestic sugar prices are influenced by global demand and supply conditions.
Gadkari said the sugar industry should increasingly look at the energy sector, where sugarcane waste and by-products can create additional revenue streams. He particularly highlighted the potential of bagasse and other biomass for producing CBG instead of relying only on cogeneration of power. According to him, converting agricultural and sugar-industry waste into CBG could also help reduce India's dependence on imported fossil fuels. He also encouraged mills to explore ethanol, bio-manure and sustainable aviation fuel as additional avenues for value creation. 
The minister also stressed the importance of improving sugar recovery. He said that even a 1 percentage-point improvement in recovery could generate additional value estimated at around ₹50,000 crore to ₹60,000 crore annually. Gadkari linked greater economic viability from sugarcane by-products with improved returns for farmers and said mills could potentially pay sugarcane farmers up to ₹600 per quintal if their overall economics improve.
Gadkari's comments come as the sugar sector faces pressure from production costs, sugar prices and the need to balance farmer payments with mill profitability. Recent government measures have also focused on strengthening domestic sugar availability while the cooperative sector is being encouraged to adopt a circular-economy model. The Ministry of Cooperation has highlighted the potential to convert sugar-industry by-products into higher-value products, while government-backed initiatives are supporting cooperative mills in setting up CBG and other value-addition facilities.
For sugar mills, the message is increasingly shifting from “sugar production” to “integrated sugarcane value creation”, with ethanol, CBG, bio-manure, cogeneration and other biomass-based products emerging as important components of the business model.
