ISMA had made a preliminary estimate of 28.2 million tonnes of sugar production for the 2019-20 marketing year.
The objective was to help millers in clearing cane arrears and divert surplus sugar for ethanol manufacturing.
Land may be used for ethanol production.
Union Minister Nitin Gadkari said land of the sugar mills can be utilised for ethanol production from sugar.
Indian mills have already shipped out 2.1 million tonnes of the sweetener.
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