India Plans to Raise Ethanol Blending in Petrol to 25% to Strengthen Energy Security

India is considering increasing ethanol blending in petrol from the current 20% level to 25% as part of its broader strategy to reduce dependence on imported crude oil and strengthen long-term energy security. The proposal has gained momentum amid rising geopolitical tensions in West Asia and concerns over global oil supply disruptions.

The move is closely linked to India’s clean energy and sustainability goals. Ethanol, which is produced from agricultural sources such as sugarcane, maize, and crop residues, is considered a cleaner alternative to fossil fuels. By increasing ethanol usage in transport fuel, the government aims to lower carbon emissions, reduce foreign exchange spending on crude oil imports, and support the rural economy through higher demand for agricultural feedstock.

Officials are expected to implement the transition gradually to ensure compatibility with vehicles and fuel infrastructure across the country. Experts believe most newer vehicles can adapt to higher ethanol blends, but some older vehicles may experience a slight reduction in fuel efficiency or require technical adjustments. Automakers and fuel companies are already working on flex-fuel technologies and engines designed to handle higher ethanol concentrations.

India had already achieved its E20 petrol target nationwide in 2026, ahead of earlier timelines, and the government is now exploring even higher blends such as E85 and E100 for the future. Alongside ethanol expansion, India is also investing in renewable energy, green hydrogen, strategic petroleum reserves, and refining capacity to create a more resilient and diversified energy ecosystem.

An E25 target reshapes downstream demand for sugarcane, grain and agricultural residue-based ethanol, and it will affect BRSR-linked disclosure for OMCs, sugar mills and biofuel investors. Our energy-transition and supply-chain-and-operations teams help clients evaluate ethanol-supply strategy against feedstock sustainability, water-use disclosure and disclosure narrative.