The All India Distillers’ Association (AIDA) has urged the government to revise procurement prices and incentives for maize- and rice-based ethanol, while allowing greater flexibility in the use of sugarcane-based feedstocks, following the Ethanol Supply Year (ESY) 2026–27 tender issued by public sector oil marketing companies (OMCs).
In a statement issued on October 17, the industry body said the policy framework should ensure the commercial viability of grain-based and sugarcane-based ethanol production, without disproportionately favouring any single feedstock.
AIDA has called for the government to reconsider the reduction in the incentive for maize-based ethanol from ₹5.79 per litre to ₹2.79 per litre. According to the association, the revised incentive brings the effective procurement rate to ₹68.86 per litre, putting pressure on the economics of grain-based distilleries amid raw material procurement and processing costs.
The association said continued support for maize-based ethanol would help sustain investments in distillery capacity and provide a stable market for farmers. It added that incentives should reflect the cost structures of different feedstocks rather than create an advantage for one over another.
AIDA has also sought an upward revision in the procurement price for ethanol produced using surplus rice supplied by the Food Corporation of India (FCI). It said the current price of ₹60.32 per litre leaves limited margins for producers amid rising raw material, energy, chemical, processing and logistics costs.
The association said a higher procurement price would help maintain the economic viability of rice-based ethanol production and encourage the use of surplus foodgrain stocks for fuel.
On sugarcane-based ethanol, AIDA has called for reasonable commercial flexibility in the use of sugarcane juice, sugar syrup and B-Heavy molasses, subject to government policy safeguards and domestic sugar requirements.
The association said flexibility in feedstock allocation would allow sugar mills and distilleries to respond to changes in availability and market conditions, while complementing grain-based production.
AIDA also highlighted the potential impact of changing monsoon patterns, including the possibility of El Niño-related agricultural uncertainty, on feedstock availability. It said a diversified supply base would help the ethanol programme manage fluctuations in agricultural output, prices and regional supply.
Vijendra Singh, president of AIDA, said the association recognised the government’s efforts to balance agricultural conditions, feedstock availability and ethanol demand in the ESY 2026–27 tender. He called for appropriate incentives and procurement prices across feedstocks to sustain investment and ensure dependable supplies.
Kushal Mittal, vice-president of AIDA, said the long-term success of the ethanol programme would depend on a diversified feedstock base and predictable policies. He cautioned that differences in incentives and procurement prices should not make one feedstock disproportionately attractive compared with others.
Bharati Balaji, deputy director general of AIDA, also called for higher procurement prices for FCI rice-based ethanol, citing limited producer margins amid elevated input and operating costs.
India’s Ethanol Blended Petrol (EBP) Programme aims to increase the use of ethanol in petrol, with the government targeting 20% blending. AIDA said a combination of viable procurement prices, calibrated incentives and operational flexibility would help sustain domestic ethanol production and support the programme’s energy security objectives.
The association said it would continue engaging with the Ministry of Petroleum and Natural Gas, the Department of Food and Public Distribution, OMCs and other stakeholders on policy measures for the sector.