Ethanol market size in India | Industry Trends, Supply Dynamics & Forecast 2025

Q: What will be the estimated CAGR of India ethanol market?

The India ethanol market is projected to grow at a CAGR of 8.4%, owing to widespread adoption of ethanol-blended fuels.

Q: Which sectors are accelerating ethanol demand in India?

The automotive sector, and alcoholic beverage manufacturers, alongside rising healthcare, and pharmaceutical applications.

Q: Who are the key players dominating the India ethanol industry?

Shree Renuka Sugars, Balrampur Chini Mills, Praj Industries, and Triveni Engineering & Industries Ltd. are some of the leading companies.

Q: How is government policy shaping ethanol production?

Strategic initiatives like the E20 program and relaxation of feedstock norms are streamlining supply and production.

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Code: MTA4286

Publication Date: Jun 2025

What is the India Ethanol Market Size?

According to 6Wresearch internal database and industry insights, the India ethanol market is expected to exhibit a compound annual growth rate (CAGR) of 8.4% during the forecast period.

The growth of this industry is expected to be proliferated by growing government emphasis on biofuel adoption, particularly the E20 fuel blend target and increased ethanol demand from industries such as automotive, chemical, and beverages.

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Growth Factors of the India Ethanol Market

The government is putting efforts towards ethanol blending programs under the National Bio-Energy Mission.
The interest from the automotive sector as ethanol-blended petrol reduces carbon emissions and fuel costs has been arising.
Modification of feedstock beyond sugarcane to grains like maize and broken rice.
Rising investment in second-generation (2G) ethanol plants using agricultural residue and biomass.
Growing support from state policies and incentives to sugar mills and distilleries.
Urbanization and changing energy consumption patterns favoring cleaner fuels.

India Ethanol Market Trends

India ethanol market is poised to witness significant trends, driven by policy shifts and technological innovations. Blending mandates are not only expanding the production ecosystem but also encouraging private and foreign players to invest in ethanol distillation units. Additionally, there is a growing movement toward flex-fuel vehicles compatible with high ethanol blends. Digitalization in supply chain management and real-time tracking of ethanol blending are also gaining traction across major fuel retail chains.

Emerging Developments in the India Ethanol Market

In general, there are several emerging developments in India Ethanol Market as there is a shift from traditional sugarcane-based ethanol to a multi-feedstock approach that includes starch-based and lignocellulosic sources. In addition, the advent of 2G ethanol plants and public-private partnerships is a game-changer for sustainable production. Moreover, ethanol is being explored as a potential raw material in pharmaceuticals and other industrial applications, adding new revenue channels beyond fuel.