India’s ethanol programme has crossed a major milestone, with cumulative ethanol supplies surpassing 800 crore litres during Ethanol Supply Year (ESY) 2025-26. However, the latest supply data from the All India Distillers’ Association (AIDA) highlights a significant shift in the feedstock mix, with grain-based ethanol accounting for nearly three-fourths of supplies in July. The trend also underlines a new challenge for the industry: creating enough demand to absorb the country’s rapidly expanding ethanol production capacity.
According to AIDA data, India received 93 crore litres of ethanol in July, taking cumulative supplies for ESY 2025-26 beyond the 800-crore-litre mark. Monthly supplies declined from 103 crore litres in June, but the share of grain-based ethanol increased during the month, reflecting the growing contribution of maize and surplus Food Corporation of India (FCI) grains to the ethanol supply chain.
Grain-based feedstocks supplied around 71 crore litres of ethanol in July, accounting for approximately 76 per cent of total monthly supplies. This was higher than the roughly 73 per cent share recorded in June, when grain-based ethanol supplies stood at 75 crore litres out of 103 crore litres. The July figures show that grain-based feedstocks are playing an increasingly important role in meeting India’s ethanol blending requirements.
Maize and surplus FCI grains were the largest contributors within the grain-based segment, supplying around 30 crore litres each in July. Together, they accounted for nearly 85 per cent of ethanol produced from grain-based feedstocks during the month. Another 11 crore litres came from damaged food grains, demonstrating the growing use of multiple grain sources in India’s ethanol production system.
Bharati Balaji, Deputy Director General, AIDA, said the 800-crore-litre milestone reflects the scale achieved by India’s domestic ethanol industry. She also highlighted the changing monthly supply mix, noting that grain-based ethanol increased its share from around 73 per cent in June to 76 per cent in July, with maize and surplus FCI grains each contributing 30 crore litres.
In contrast, sugarcane-based ethanol supplies declined in July. Sugarcane-based feedstocks contributed around 22 crore litres, compared with 28 crore litres in June, reducing their share of total monthly supplies to approximately 24 per cent from 27 per cent. Within the sugarcane-based segment, B-Heavy Molasses accounted for 17 crore litres, while Sugarcane Juice contributed 4 crore litres and C-Heavy Molasses around 1 crore litre.
The July data indicates that India’s ethanol supply basket is becoming increasingly diversified, with grain-based feedstocks now dominating monthly supplies. This shift comes as the country continues to expand ethanol production capacity and strengthen its ethanol blending programme.
According to AIDA, the industry’s next major challenge is not simply increasing ethanol production but ensuring adequate demand for the additional capacity being created. Bharati Balaji said the supply side has demonstrated its ability to respond through multiple feedstocks and a growing production base, but the next step is to create sufficient demand for this capacity.
Higher ethanol blending, wider adoption of flex-fuel vehicles and new industrial and commercial applications of ethanol could provide additional avenues for demand growth. AIDA believes a clear and predictable policy framework for expanding ethanol applications will be critical to ensuring efficient utilisation of production capacity, supporting the agricultural value chain and advancing India’s transition towards cleaner domestic fuels.
With ethanol supplies crossing 800 crore litres and production capacity continuing to expand, India’s ethanol industry is entering a new phase. The focus is now expected to shift from building supply capacity to creating new and sustainable demand for ethanol, while maintaining a balanced feedstock ecosystem involving sugarcane, maize and other grain-based sources.
