India's drive to blend more ethanol into petrol and shield itself from global energy price shocks has ​increased the amount of farmland tied to fuel production more than eight-fold in four years, according to new research.

India depends on imports for some 85 per cent of its oil, ‌so using more ethanol, made from crops such as sugarcane, rice and maize, is central to its plans to boost ​its energy security and reduce planet-heating emissions.

State-run oil companies currently mix 20 per cent ethanol in each litre of petrol before it reaches ⁠the pumps.

The area of land linked to ethanol feedstocks, especially maize and rice, has risen from 0.7 million hectares in 2020-21, to 5.7 million hectares in 2024-25, reflecting a rapid expansion in grain-based ethanol production, data presented by Delhi-based research organisation Arcus Policy Research this month showed.

While India's ethanol programme was initially driven by surplus sugar supplies, by ‌2024-25 only 32 per cent of ethanol supplied to public fuel retailers came from sugarcane, while grain-based ethanol accounted for 68 per cent, according to Arcus Policy Research.

The shift is reshaping crop choices, increasing maize use for fuel and relying heavily on government rice stocks to meet blending ‌targets, said researchers and industry executives at a policy discussion this month where the data was presented.

In just over a decade, India ‌increased ⁠the amount of ethanol blended into petrol more than 13-fold, from 1.5 per cent in 2014 to 20 per cent in 2025, reaching its E20 ⁠target five years ahead of schedule despite a backlash from some drivers over reduced fuel efficiency and concerns about engine wear.

The government says the shift to biofuel saved ₹1.06 lakh crore ($12 billion) in crude oil imports and avoided 54.4 million tonne of carbon emissions in a decade, equivalent to emissions from 12 million petrol cars a year. It also describes the reduction in fuel ​efficiency as marginal.

The gains, however, come with trade-offs. The ‌diversion of food crops toward fuel has raised concerns over grain availability, as well as land and water use. The expansion has also triggered tensions in some rural regions over the growing footprint of distilleries.

Scientists continue to debate whether crop-based ethanol significantly lowers emissions once the land and water needed to grow the crops are factored into the equation.

ETHANOL IS RESHAPING AGRICULTURE

"The rapid expansion reflects a major shift in India's ethanol programme away from ‌sugarcane and toward grains such as maize and rice," said Shweta Saini, CEO of Arcus Policy Research.

Nearly 29 per cent of India's maize production ​was diverted towards ethanol in 2024-25, while maize cultivation expanded from 9.9 million hectares in 2020-21, to 13.7 million hectares, the data showed.

Researchers said the shift was beginning to ripple through agricultural supply chains, affecting feed markets, crop choices and land use patterns.

Saini ⁠said the market for soybeans, a major ingredient of animal feed in India, had already been hit by farmers growing maize for ethanol production, which generates a byproduct that is also used to feed livestock.

"There was a biofuel being produced and suddenly soybean farmers were actually the ones suffering," she said.

Researchers and ‌former policymakers also raised concerns over the growing diversion of government rice stocks toward ethanol production.

Former agriculture secretary Siraj Hussain said much of the broken rice being supplied for ethanol was still suitable for human consumption and would previously have entered India's subsidised public food distribution system.

India allocated a record 5.2 million metric tonne of rice from state stockpiles for ethanol production in 2024-25, according to Reuters.

NUTRITION SECURITY COULD BE A TRADE-OFF

Saini said the issue reflected wider contradictions in Indian agriculture policy, where governments continue incentivising paddy cultivation despite repeated calls to diversify toward pulses and less water-intensive crops.

She warned that while food grain supplies may remain stable, shifting more land and incentives toward fuel-linked crops could increasingly affect India's "nutrition security", especially as the country remains heavily dependent on imports of edible ‌oils and pulses.

The concerns come as Prime Minister Narendra Modi has urged citizens to reduce edible oil consumption as part of austerity measures announced after rising energy prices linked to the Middle ​East conflict increased pressure on India's foreign exchange reserves.

Yet India's ethanol push is unlikely to slow, with policymakers and industry groups increasingly advocating higher blends beyond E20 to reduce the reliance on imported oil.

Industry executives said the programme had created a ⁠large domestic market for crops, such as maize and sugarcane, while helping to reduce oil imports.

"It economically makes a lot of sense that we go for ethanol," said ⁠Vijendra Singh, president of the All India Distillers Association. "When money goes to the rural economy, it gives this whole ethanol programme advantages."

Singh dismissed concerns that ethanol expansion would necessarily reduce food production, arguing farmers would continue growing crops based on profitability and demand. "The farmer will choose what ‌is good for him," he said.

The Ministry of Petroleum and Natural Gas and the Department of Agriculture and Farmers Welfare did not respond to requests for comment.

Researchers, however, warned that sustaining higher blending targets could become increasingly difficult as climate shocks, changing diets and rising demand for feed ​and edible oils intensify competition for India's finite agricultural land, even as the country's gross cropped area shows little expansion.

Published on May 26, 2026