India is experiencing a significant shift in its energy landscape, one that is easing the country’s reliance on imported oil while creating new prospects for farmers and boosting the rural economy. The swift growth of ethanol production is driving this transformation, and its positive effects are now becoming evident nationwide.
Tarun Sawhney, Vice Chairman and Managing Director of Triveni Engineering and Industries Ltd (TEIL), shed light on the increasing ethanol production capacity, stating, “India’s ethanol production capacity has grown from 421 crore litres in 2013 to 1,810 crore litres today. With 816 crore litres from molasses, 858 crore litres from grains, and 136 crore litres from dual-feed plants, India is well-positioned to meet the projected demand of 1,350 crore litres for E20 by ESY 2025–26. In May 2025 alone, 95.1 crore litres were blended, contributing to over 572 crore litres since November 2024. The average blending rate of 18.8 per cent till May 2025 highlights the country’s rapid progress toward the 20 per cent target. The increase in blending has delivered substantial benefits, including foreign exchange savings of over Rs 1 lakh crore, improved income stability for sugarcane and foodgrain farmers, and significant job creation across rural India.”
“However, critical challenges remain, particularly around feedstock diversification, infrastructure scale-up, and price rationalisation. Reaching E20 and beyond will require continued policy momentum, reinforced through clear mandates and sustained incentives. Regulatory measures such as easing licensing norms for new distilleries, standardising fuel quality, offering tax breaks, and enabling carbon market participation will be essential to scale supply efficiently,” he further added while speaking to ChiniMandi.
Triveni’s Vice Chairman and Managing Director also urged the government to increase ethanol prices and the Minimum Selling Price (MSP) of sugar. He stated, “At the same time, the sugar industry awaits a much-needed revision in ethanol procurement prices to reflect the recent sugarcane FRP hike to Rs 355 per quintal. Ethanol rates have largely remained static for two years, except for a modest increase in C-heavy ethanol to Rs 57.97 per litre, placing growing financial strain across the value chain, from maize and juice to grain-based variants. Separately, sugar mills have called for an upward revision of the Minimum Selling Price (MSP) of sugar to maintain financial viability amid rising input costs. These developments underline the urgent need for a long-term pricing policy that links ethanol realisation to input costs—ensuring timely farmer payments, pricing stability, and sustained investment confidence across the sector.”
India has indeed achieved the 20% blending within a given timeframe, which brought significant gains in terms of reduced dependency on imported oil, the increased income to farmers and boosting the rural development, but the major downside to it is the diversification of sources, specially feedstock, because the ethanol squeezed out of food grains does have a debilitating effect on the food prices and overall food security. It is significant in the context of millions of people still under hunger and poverty.