Bharati Balaji, Director and General Counsel of the All India Distillers’ Association (AIDA), has shared her views on Union Budget 2026 and its impact on India’s ethanol and bio-energy sector. She explained that the Budget signals an important shift—from simply expanding production capacity to reducing market and demand-related risks for the industry.
According to Balaji, the most important takeaway for the distillery and ethanol sector is the government’s continued focus on long-term ethanol blending certainty, diversification of raw materials, and strengthening supply chains. These measures are closely linked with India’s goals of energy security, sustainable agriculture, and building strong domestic value chains.
Although the Budget did not announce any single new scheme for ethanol, its alignment with the national ethanol blending roadmap and alternative fuel policies sends a strong message of stability. This approach improves predictability in ethanol demand, pricing, and investment planning. As a result, the sector is moving away from rapid volume expansion toward more stable, low-risk growth, making investments more attractive and bankable across grain-based, dual-feedstock, and advanced biofuel projects.
On compliance and governance, Balaji noted that as ethanol blending moves beyond E20 and distilleries become more closely linked with fuel, food, and agriculture supply chains, companies will need stronger governance systems. This includes better controls over feedstock sourcing, environmental compliance, pricing frameworks, and long-term supply contracts.
She also pointed out that regulatory scrutiny is increasing in areas such as sustainability, water usage, emissions, and inter-state movement of ethanol. To manage this, businesses must adopt robust compliance mechanisms and clearly define risk-sharing between distillers, oil marketing companies, and state authorities. With growing public procurement and policy-driven demand, clear contracts, dispute prevention systems, and transparent regulations will become even more important.
Overall, Balaji believes that Union Budget 2026 strengthens a rules-based and predictable environment for the ethanol and bio-energy sector. This will support long-term growth, encourage investment, and reduce execution and policy risks in the years ahead.
