India is evaluating a U.S. request to ease restrictions on ethanol imports as part of broader trade negotiations with Washington aimed at avoiding potential punitive tariffs.
Bloomberg citing the people familiar with the matter reported that U.S. negotiators are pushing for India to permit ethanol imports for blending with fuel. Currently, Indian regulations promote domestic ethanol production and only allow imported ethanol for non-fuel purposes.
India, one of the first countries to enter trade negotiations with the U.S., is aiming for an early agreement. During a visit to Qatar on Thursday, President Donald Trump claimed New Delhi had offered to remove all tariffs on American goods. However, Indian Foreign Minister S. Jaishankar later clarified that the negotiations were still ongoing. Commerce Minister Piyush Goyal is expected to visit the U.S. this weekend for further discussions.
According to the news report by Bloomberg, U.S. agricultural groups, including the National Corn Growers Association, have been lobbying for greater access to the Indian market, particularly for corn and corn-based products like ethanol and distillers dried grains.
Last month, Bloomberg reported that the trade discussions between the two countries could cover 19 sectors, including agriculture, e-commerce, and data storage.
India has been promoting domestic biofuel production to cut its reliance on imported energy.
Prime Minister Narendra Modi’s government may also be cautious about the potential impact of unrestricted ethanol imports on Indian farmers. The government has been encouraging farmers to shift from water-intensive crops to alternatives such as corn, a key feedstock in ethanol.
Meanwhile, state-run oil refiners worry the U.S. could initially offer ethanol at low prices to dominate the market, only to raise prices later, a move that could hurt their operations.
