Sugar Body ISMA Urges Government To Maintain Fuel Ethanol Import Restrictions

The Indian Sugar and Bio-Energy Manufacturers Association has urged the government to maintain restrictions on fuel ethanol imports, warning that allowing such imports could undermine national energy security and self-reliance in green fuels.

The industry body expressed concern as the United States, backed by its farm lobby groups, has been actively lobbying India to lift these restrictions and allow ethanol imports for fuel use as part of broader trade negotiations, hoping to access India's large ethanol fuel market.

Negotiations are ongoing, with Indian commerce officials engaging US counterparts, but no policy changes allowing fuel ethanol imports to have been implemented as of this month.

ISMA Director General Deepak Ballani, in a letter to Commerce Minister Piyush Goyal, demanded that the government maintain current restrictions on fuel ethanol imports for blending purposes and continue supporting indigenous ethanol production.

Ballani also requested the government reassure stakeholders on 'policy stability,' thereby encouraging continued investment and farmer-centric development.

He highlighted that opening up fuel ethanol imports would pose several challenges, including risks of disrupting farmer payment cycles, especially since ethanol prices are closely tied to the Fair and Remunerative Price of Sugarcane.

It could also dilute significant gains made in domestic capacity building, investment, and job creation, and may lead to under-utilisation of Indian ethanol plants, many of which are still in early stages of capital recovery.

Currently, the government has placed ethanol imports under the 'restricted category'.

India has been aggressively promoting its domestic ethanol industry to reduce reliance on crude oil imports, aiming for a 20% ethanol blending mandate ahead of the original 2030 target.

India's ethanol production capacity has grown by over 140% since 2018, with investments exceeding Rs 40,000 crore. Ethanol blending has reached 18.86%, and 'we are firmly on track to meet the 20% blending target in this year itself,' Ballani said.

He added that today, the Ethanol Blending Programme is not just an energy programme, but a model for inclusive rural growth, empowering over 55 million sugarcane farmers and their families.