News Capsule: Shift in India’s Ethanol Policy
05-Nov-2025 11:31 AM
News Capsule: Shift in India’s Ethanol Policy
★ India’s ethanol policy has now become grain-focused instead of sugarcane-based, putting pressure on the sugar industry.
★ For the 2025–26 supply year (November–October), oil marketing companies have placed supply orders for a total of 10.5 billion litres of ethanol. Of this, only 28% will come from sugar-based feedstocks (such as cane juice, B-heavy and C-heavy molasses), while the remaining 72% will be sourced from grain-based feedstocks (mainly maize and rice).
★ In 2019–20, the sugar sector accounted for 91% of ethanol supplies, which dropped to 70% in 2022–23 and now stands at just 28% in 2025–26.
★ During the election year 2023–24, ethanol production from sugarcane feedstocks was restricted, and sugar output fell by 9–12%. To maintain ethanol blending progress, the government promoted grain-based ethanol. Although the ban on sugarcane feedstocks has since been lifted, the sugar industry has not regained its earlier share.
★ According to ISMA, the government’s current ethanol allocation policy gives preference to “grain-based feedstocks.” This has adversely affected sugar-based ethanol, reduced mill revenues, and could delay payments to cane farmers — ultimately threatening sugarcane cultivation in the long run.