A total of 38 ethanol distilleries receiving the benefit of Ethanol Interest Subvention Scheme notified by the Government for enhancement and augmentation of ethanol production capacity are likely to be commissioned. The projected annual capacity of these distilleries are around 169 crore litres, according to the Ministry of Consumer Affairs, Food and Public Distribution data.
As of June 30, 2025, India’s annual ethanol production capacity stands at 1,822 crore litres, supported by 499 distilleries during the Ethanol Supply Year (ESY) 2024–25. Maharashtra leads in ethanol production capacity with 396 crore litres, followed by Uttar Pradesh with 331 crore litres and Karnataka with 270 crore litres.
State-wise details of ethanol distilleries receiving the benefit of Ethanol Interest Subvention Scheme which are likely to be commissioned are below:
| State/UT | No. of Distilleries | Projected Annual Capacity (Crore litres) |
|---|---|---|
| Andhra Pradesh | 2 | 15 |
| Bihar | 1 | 2 |
| Gujarat | 1 | 8 |
| Karnataka | 5 | 17 |
| Madhya Pradesh | 3 | 13 |
| Maharashtra | 8 | 13 |
| Odisha | 5 | 20 |
| Punjab | 2 | 9 |
| Rajasthan | 2 | 25 |
| Uttar Pradesh | 8 | 44 |
| West Bengal | 1 | 3 |
| Total | 38 | 169 |
(Data source:Ministry of Consumer Affairs, Food and Public Distribution)
With a view to enhance the ethanol production capacity in the country to achieve the blending targets set under EBP Programme, the Government has notified various ethanol interest subvention schemes from July 2018 to April 2022.
Under these ethanol interest subvention schemes, Government is facilitating entrepreneurs to set up new distilleries (molasses based, grain-based and dual-feed based) or expansion of existing distilleries (molasses based, grain-based and dual-feed based) throughout the country. Interest subvention @ 6% per annum or 50% of rate of interest charged by banks/financial institutions, whichever is lower, on the loans to be extended by banks/financial institutions is being borne by the Central Government for five years including one-year moratorium.
In addition to this, further capacity is expected to be added by ethanol distilleries currently under construction, which have not availed benefits under the Ethanol Interest Subvention Scheme.
India has successfully achieved 20% ethanol blending in petrol in 2025, five years ahead of its target, Petroleum and Natural Gas Minister Hardeep Puri recently announced.
This remarkable growth has helped reduce the country’s dependence on imported crude oil, leading to a significant saving of Rs. 1.36 lakh crore in foreign exchange.
At the same time, Rs. 1.96 lakh crore has been paid to distilleries, fueling the expansion of the biofuel industry, while Rs. 1.18 lakh crore has gone directly to farmers, boosting rural incomes and strengthening the agricultural economy, Puri added.
The environmental impact of this shift has also been significant, with 698 lakh tonnes of CO₂ emissions reduced due to the adoption of cleaner fuel.
