India is now the largest producer of sugar in the world. Although subject to cyclical fluctuations, sugar production has grown phenomenally in the mid-1990s. It expanded from 14.6 mn tonnes in 1994-95 to 16.5 mn tonnes in 1995-96, representing a growth of 18% in one year. The next two years witnessed a sharp fall to below 13 mn tonnes in 1997-98. Keeping to the cyclical nature of the industry, the years following witnessed a smart rise in production to 15.5 mn and 18.2 mn tonnes in 1998-99 and 1999-00, respectively. This marked a satisfactory upward movement at over 12% in the period 1996 to 2000. The country had a total supply of 31.5 mn tonnes in 2002-03. With consumption pegged at 18.4 mn tonnes and exports at 1.5 mn tonnes, it was left with stocks of 11.6 mn tonnes by end September 2003. A large number of sugar producing companies, 144 out of 564, remained closed during the season. India continued to have a comfortable demand-supply position throughout the 1990s, inspite of fluctuations in production. On a longer term, there was no reason for importing sugar. The country, however, went ahead and imported sizable quantities in the 1997-2000 period. At the same time sugar exports expanded to 1.2 mn tonnes in 2000-01 and to 1.5 mn tonnes in 2002-03. The import quotas are decided by the government and do not attract import duty. The industry complains that while there was no duty on imported sugar, nor even a countervailing duty, the local industry is subject to various kinds of levies such as purchase tax, cane cess and excise duty. WTO prescribes a maximum duty of 150% on sugar. In the US, the import duty on sugar is as high as 130%. India is the only country which allowed sugar to be imported at zero duty. Most countries imposing such high tariffs are industrial countries with less than 5% of the population depending on agriculture. The Indian Sugar Mills Association has been for futures trading in sugar to provide a cushion to the industry once decontrolled. The National Federation of Cooperative Sugar Mills, the apex organisation of 250 cooperative sugar mills accounting for nearly 60% of country's sugar production, did not support it. The government has removed all restrictions on sugar exports and permitted commencement of future trading in white sugar. Ethanol is an organic alcohol with a wide range of uses, both industrially and recreationally. It has a relatively simple manufacturing process making it readily available and cheap to manufacture. The main raw material for the ethanol is molasses available in sugar mills. Co generation is the simultaneous of process heat and electric power using single fuel. Per capita power consumption is a barometer of country prosperity, economic growth and industrialization. Co-generation power plant based on bagasse makes use of generation of power from fuel of bagasse. This is regarded as the clever way of converting waste into useful energy. In sugar industry, it is required to product both steam and the electricity for driving the sugar processing. To venture into this integrated plant is very profitable.