Although India’s ethanol production capacity has grown rapidly, domestic demand has not kept pace, leaving about 7 billion litres of ethanol without a set market and forcing producers to seek new buyers and alternative uses, Indian outlet The Economic Times reports.
According to the report, India’s annual ethanol capacity has risen to about 20 billion litres, with another 4 billion expected this year. But the E20 fuel blending programme needs about 11 billion litres a year, and non-fuel industries such as alcohol, pharmaceuticals and chemicals use another 3 to 3.5 billion litres, leaving about 7 billion litres with no set market.
Industry sources say that because of excess capacity, Indian ethanol plants are running at only about 60 percent of capacity on average, and utilisation will stay between 65 and 75 percent over the next three years. Maharashtra alone has a surplus of about 2.77 billion litres.
Contracts with oil marketing companies for the 2025-26 supply year cover 10 billion litres, but 8.95 billion litres had been supplied by August.
While producers look for ways to handle the surplus, the government has for now put on hold plans to mandate blends above E20, such as E25 or E30. Because of consumer concerns about E20’s effect on car engines, the roadmap has been kept at E20 until October 31, 2026.
Export opportunities also remain limited. Exports of first-generation ethanol are restricted, though India has allowed exports of second-generation ethanol since September 2025. Small amounts of non-fuel ethanol are exported to markets such as Tanzania, Angola and Kenya, and the Grain Ethanol Manufacturers Association (GEMA) is in talks to supply Nepal, which plans 10 percent ethanol blending in petrol but has no processing capacity of its own.
The government and producers are also working on blending ethanol-derived components into diesel as well as petrol.
Non-fuel sectors such as alcohol and pharmaceuticals now account for 18.7 percent of total ethanol demand in India, and the extra neutral alcohol (ENA) market reached about 3.8 billion litres in 2025, growing 5 percent a year as drinkers shift from country liquor to Indian-made foreign liquor brands.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report