The country is awaiting the upcoming Budget, which Finance Minister Nirmala Sitharaman is scheduled to present on February 1, 2026. Various sectors and industries are outlining their expectations ahead of the announcement.
The ethanol industry has sought greater focus on incentivizing E100-ready infrastructure and accelerating the mandate for Sustainable Aviation Fuel (SAF) to absorb the additional ethanol capacity in Budget 2026–27.
Dr. Sangeeta Srivastava, Executive Director, Godavari Biorefineries Ltd. (GBL), applauded the achievement of E20 blending ahead of schedule and said, “Having successfully achieved E20 blending ahead of schedule, India now faces a productive surplus that requires urgent demand-side policy innovation. Budget 2026 should focus on incentivizing E100-ready infrastructure and accelerating the mandate for Sustainable Aviation Fuel (SAF) to absorb this additional ethanol capacity. It will lead to a strategic shift toward ethanol-to-chemicals and high-value bio-based derivatives is essential.”
“This budget must provide the fiscal framework to transition from fuel blending to a global leadership role in the Sustainable Chemical economy,” she further added.
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has also sought a budgetary outlay of ₹15,000–20,000 crore to support advanced biofuel projects, including second-generation ethanol and Sustainable Aviation Fuel (SAF), as the sugar industry grapples with surplus production, weak prices, and constraints on ethanol diversion.
The OMCs have allocated around 1,048 crore litres of ethanol against 1,776 crore litres of offers submitted by manufacturers across the country for ESY 2025–26 (Cycle 1). OMCs had invited tenders for the supply of 1,050 crore litres of ethanol for ESY 2025–26.
In the allocation, maize holds the largest share at 45.68 per cent (around 478.9 crore litres), followed by FCI rice at 22.25 per cent (around 233.3 crore litres), sugarcane juice at 15.82 per cent (around 165.9 crore litres), B-heavy molasses at 10.54 per cent (around 110.5 crore litres), damaged food grains at 4.54 per cent (around 47.6 crore litres), and C-heavy molasses at 1.16 per cent (around 12.2 crore litres).
Currently, India’s total ethanol production capacity as of November 2025 is about 1,990 crore litres, and the industry is calling for an increase in ethanol blending beyond 20 per cent, stating that capacities are underutilised.
The budget push comes at a time when the sugar industry is navigating what the industry has described as a challenging phase, despite strong production.
