India’s sugar industry body has urged the government to retain existing restrictions on ethanol imports for fuel blending, warning that any relaxation could harm domestic biofuel producers and sugarcane farmers.
In a letter addressed to Commerce and Industry Minister Piyush Goyal, the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) raised concerns over possible policy shifts under ongoing trade discussions with the United States.
ISMA said the Ethanol Blending Programme (EBP), a key component of India’s clean energy drive, has played a critical role in reducing the country’s reliance on crude oil imports and improving farmer incomes. The association highlighted that the programme is backed by the National Policy on Biofuels (2018) and a Directorate General of Foreign Trade (DGFT) notification from August 21, 2018, which categorised ethanol imports for fuel blending as “restricted.”
Supportive policy measures, including interest subvention schemes, have encouraged large-scale investments in domestic ethanol production. According to ISMA, India’s ethanol production capacity has increased by more than 140% since 2018, with investments exceeding ₹40,000 crore. Ethanol blending has reached 18.86% this year, putting the country on track to meet its 20% blending target ahead of the original 2025-26 Ethanol Supply Year (ESY) goal.
The industry body warned that opening up imports could disrupt the ethanol supply chain and adversely affect sugarcane farmers. Ethanol prices are closely linked to the fair and remunerative price (FRP) of sugarcane, and cheaper imports could result in payment delays to farmers and underutilisation of domestic production facilities.
“Any move to liberalise ethanol imports risks undermining national energy security and weakening India’s position in clean fuel self-sufficiency,” ISMA stated in its letter.
The association urged the Ministry of Commerce and Industry to uphold the current import restrictions and reaffirm policy continuity to sustain investor confidence and support rural livelihoods. It also called for measures to protect domestic capacity building, ensure timely farmer payments, and preserve India’s leadership in sustainable bioenergy.
ISMA expressed confidence that the government would continue to prioritise national interest, strengthen clean fuel infrastructure, and reinforce its commitment to a self-reliant ethanol economy.
