Archive · 7 Aug 2026
India refuses to open ethanol market to US imports
The United States and India are talking about a trade deal, which is an agreement about what each country buys and sells.
Some reports said India had agreed to buy ethanol from America.
Ethanol is a kind of fuel made from plants like sugarcane or corn.
India said that report was wrong and that it will keep making its own ethanol.
India buys most of its oil from other countries, which costs a lot of money.
Mixing ethanol with petrol helps India use less oil and helps farmers earn money by growing sugarcane and other crops.
The US makes more ethanol than any other country, mostly from corn.
India worries that buying American ethanol could hurt its own sugar mills and factories.
India has already agreed to buy some other American products, like soybeans and fruits, but not ethanol for fuel.
India's Commerce and Industry Ministry dismissed as "misleading" reports that it had agreed to open its ethanol market to US exporters as part of the proposed India-US trade agreement.
India imports more than 85% of its crude oil needs, and its fuel blending programme aims to reduce fossil fuel consumption, lower carbon emissions and cut oil import costs.
Under the Ethanol Blended with Petrol (EBP) Programme, fuel ethanol is sourced entirely from domestic producers, mainly sugar mills and grain-based distilleries, with a target of blending 20% ethanol with petrol.
The United States is the world's largest ethanol producer, with most of its output coming from corn, and cheaper American ethanol could impact India's domestic producers.
India has offered greater access for select US agricultural and industrial products such as dried distillers' grains, red sorghum, soybean oil, fruits and nuts, but fuel ethanol has remained outside the proposed concessions.
- Who
- India's Commerce and Industry Ministry, led by Minister Piyush Goyal, and the United States, which was seeking greater access to India's ethanol market.
- What
- India ruled out allowing US ethanol imports for its petrol blending programme, rejecting reports that it had agreed to open its ethanol market.
- When
- The clarification was issued on Thursday during ongoing India-US trade talks; a senior US official said the agreement could be finalised within the next few months.
- Where
- India (referred to as New Delhi) and the United States (Washington), in the context of a proposed bilateral trade agreement.
- Why
- India says its ethanol policy is linked to energy security, farmer incomes, domestic biofuel producers and climate goals, and does not want imports to weaken those objectives.
India's domestic-first stance
US market access push
Ethanol market access
India's domestic-first stance
India says opening its ethanol market to US imports would weaken its domestic biofuel ecosystem, hurt sugar mills and distilleries, and undercut energy security and farmer income goals.
US market access push
The US, the world's largest ethanol producer, was seeking greater access to India's ethanol market as part of negotiations for the broader bilateral trade pact.
Trade concessions
India's domestic-first stance
India will move ahead with the trade agreement only after securing favourable terms and maintaining a competitive position in the US market, keeping strategically important sectors like ethanol out of negotiations.
US market access push
The proposed bilateral trade agreement aims to improve market access and reduce trade barriers, and reports suggested ethanol was among the US concessions India had agreed to.
- Announcement
- India's Commerce Ministry dismissed reports of ethanol market access for the US as 'misleading'
- Crude oil import dependence
- Over 85%
- Ethanol blending target
- 20% ethanol with petrol
- Suppliers
- Domestic sugar mills and grain-based distilleries
- Largest ethanol producer
- United States, mostly from corn
- US products offered access
- Dried distillers' grains, red sorghum, soybean oil, fruits and nuts
- Programme
- Ethanol Blended with Petrol (EBP) Programme
- US official's estimate
- Trade agreement could be finalised within the next few months