Despite adequate domestic output, India continues to import ethanol from US
India’s ethanol blending reached 20% in 2026, with production rising from 450 million litres in 2016 to 9.7 billion litres in 2025. Despite higher domestic output, ethanol imports remain significant, with the U.S. supplying 94% of imports in FY26, highlighting continued import dependence.
On July 14, Union Minister Nitin Gadkari defended India’s ethanol-blending policy, stressing that the ongoing West Asia crisis highlights why the country cannot remain dependent on imported fuel.
India’s ethanol fuel production has risen dramatically, from 450 million litres in 2016 to 9,700 million litres in 2025, with consumption levels closely tracking production. The ethanol-blending rate has steadily increased, moving from just 1 per cent in 2016 to 13 per cent in 2024, and further to 20 per cent in 2026.
However, this surge in domestic production has had only a minimal impact on reducing imports. India’s ethanol fuel trade deficit stood at $280 million in financial year 2018-19 (FY19), widened to $459 million in FY25, and eased slightly to $403 million in FY26. Despite higher blending rates, production has slightly exceeded consumption for the past three years. Even so, India imports most of its ethanol from the US. The US share of India’s ethanol fuel imports rose from 79 per cent in FY25 to 94 per cent in FY26.
However, India’s total ethanol imports remained under $0.5 billion throughout. Globally, India ranked second in ethanol blending in 2025, behind Brazil and ahead of Argentina among ethanol-producing countries.
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Source : Business Standard
