The Commerce and Industry Ministry on Thursday categorically denied any commitment to import ethanol from the United States for fuel blending, dismissing media reports suggesting India was planning large-scale imports of the biofuel as 'baseless and factually incorrect'. According to reports from PTI, the ministry stated that 'there is no import of ethanol for fuel blending from the US' and clarified that 'no concessions or commitments relating to ethanol imports had been made during the ongoing India-US trade negotiations'. The ministry further reiterated that 'any suggestion of a policy change to permit large-scale imports of fuel ethanol from the US is misleading'. The clarification comes amid ongoing negotiations between India and the US on a bilateral trade agreement aimed at expanding market access and reducing trade barriers.
India has successfully achieved its 20% average ethanol blending target ahead of schedule, with the fuel's rollout widened across the country in April 2026. As reported by PTI, E20 is petrol blended with 20% ethanol, representing a significant milestone in India's biofuel programme. The government-backed studies claim only a marginal 1–6% drop in fuel efficiency, with minimal risk of corrosion in E20-compatible vehicles. According to the latest government data, the Ethanol Blended Petrol Programme has saved over ₹1.97 lakh crore in foreign exchange, substituted nearly 316 lakh metric tonnes of crude oil, reduced around 952 lakh metric tonnes of CO₂ emissions and transferred over ₹1.66 lakh crore to farmers. This domestic focus remains unchanged despite ongoing trade negotiations with the US.
The ministry emphasized that ethanol used under India's Ethanol Blended Petrol (EBP) Programme continues to be sourced entirely from domestic producers and that 'India's fuel blending programme and ethanol procurement continues to be governed solely by India's domestic policy requirements'. As reported by PTI, this domestic sourcing framework remains intact despite the government's assurance that no concessions or commitments relating to ethanol import for fuel blending from the US have been made in trade discussions. According to the Ministry of Petroleum and Natural Gas (MoPNG), ethanol is purchased from domestic producers at fixed, remunerative prices to ensure farmers receive fair returns. For instance, maize-based ethanol is procured at around ₹71.86 per litre, excluding GST, transportation, storage and handling charges. At current crude oil prices of around $70 per barrel, producing E20 petrol costs more than producing conventional petrol, though this could change if international crude oil prices rise to $120-$130 per barrel.
The clarification comes amid political controversy, with Aam Aadmi Party (AAP) national convenor Arvind Kejriwal having alleged that the Centre was promoting ethanol-blended fuel under pressure from US President Donald Trump. According to PTI, Kejriwal has alleged that the government plans to introduce ethanol blending in diesel and aviation turbine fuel (ATF). The AAP leader has urged people to avoid purchasing new petrol and diesel vehicles for the time being amid concerns about potential expansion of ethanol blending. Union Civil Aviation Minister Ram Mohan Naidu Kinjarapu has now categorically rejected as 'completely false and irresponsible' claims that the government was planning to blend ethanol with Aviation Turbine Fuel (ATF), emphasizing that 'ethanol and Sustainable Aviation Fuel (SAF) are 'entirely different' fuels' and that SAF is an internationally certified aviation fuel recognised by the International Civil Aviation Organization (ICAO). The minister added that 'spreading misinformation on aviation safety only creates needless anxiety among air travellers' and that passenger safety remains the Government's highest priority.
The latest statement is particularly significant as India and the US are negotiating a trade pact since March, with eight rounds of negotiations held so far. As reported by PTI, both countries finalised the framework for the first phase of the bilateral trade agreement in February. The ongoing trade discussions have sparked concerns about potential policy changes regarding ethanol imports, which the government has now categorically denied. The government described the blending program as an important part of India's energy transition and biofuel strategy, noting that India imports about 88.5 percent of the crude oil it consumes, leaving the country exposed to global price volatility and supply disruptions. Domestically produced ethanol made from sugarcane, corn and rice is intended to reduce that dependence while supporting Indian agriculture. Between fiscal 2014-15 and May 2026, the program saved more than ₹1.90 lakh crore in foreign exchange by replacing about 310 lakh metric tons of imported crude oil, with farmers earning more than ₹1.6 lakh crore in additional income while carbon emissions were reduced by more than 930 lakh metric tons.
