Higher ethanol blending, faster FFV rollout, fuel infra push and GST/VAT rationalisation can help India save up to ₹2 lakh crore a year in forex: GEMA
India’s ethanol “overcapacity” is a strategic asset built on clear government policy under the Ethanol Blending Programme, GEMA said. Industry invested ahead of demand for higher blends and FFVs. Expanding ethanol consumption could boost rural incomes, cut oil imports, and deliver major economic and environmental gains.
India’s ethanol manufacturing capacity, often described as “overcapacity”, is in fact a strategic national asset created through clear policy direction and long-term planning, the Grain Ethanol Manufacturers’ Association (GEMA) said today. The current situation is not the result of speculative investment, but a direct outcome of strong policy signals and a future-oriented programme led by the Government of India.
The Ethanol Blending Programme (EBP) was never intended to stop at 20% blending, which was envisaged only as a checkpoint to assess feedstock availability, investor capability, rural impact and system readiness. In line with consistent policy signals, industry invested ahead of demand to build long-term capacity. India’s roadmap has repeatedly pointed towards higher ethanol blends, the adoption of Flex-Fuel Vehicles (FFVs) and global benchmarks such as the Brazil model, where ethanol replaces nearly 55% of petrol consumption, and investments were therefore made in alignment with this long-term direction rather than short-term procurement cycles.
Ethanol blending has already delivered significant national benefits. In FY 2024–25 alone, the programme enabled savings of ₹40,000 crore in foreign exchange while injecting nearly ₹50,000 crore into the rural economy. Rural India has witnessed tangible growth through higher farmer incomes, expanded employment and stronger agri-based value chains. India continues to remain a surplus grain nation, fully capable of supporting both food security and clean fuel production.
Commenting on the issue, Dr. C.K. Jain, President, Grain Ethanol Manufacturers Association (GEMA), said, “Ethanol capacity was created in response to a clear national mandate. The need of the hour is to expand demand, not contract capacity, so that the full economic, rural and environmental benefits of the programme can be realised.”
GEMA said demand expansion through higher blending, accelerated rollout of FFVs, rapid development of ethanol dispensing infrastructure and rationalisation of GST/VAT on ethanol can help India save up to ₹2 lakh crore annually in foreign exchange, against an oil import bill of nearly ₹22 lakh crore.
“The capacity exists. The investment is made. Now the policy must unlock consumption,” GEMA concluded.
To Read more about Ethanol Industry & Bio Energy News, continue reading Agriinsite.com
Source : Chinimandi
