Isma urges Centre to ban ethanol imports, flags ₹40,000 crore risk

The Indian Sugar and Bio-Energy Manufacturers Association (Isma) has urged the government to restrict ethanol imports meant for fuel use, warning that such a move could jeopardise investments in the sector and disrupt timely payments to sugarcane farmers.

 

The appeal comes amid ongoing negotiations between India and the United States for a Bilateral Trade Agreement (BTA), under which, according to sources, the US is pushing for access to the Indian market for ethanol used as fuel. The US primarily produces ethanol from grains. 

In a letter to Commerce Minister Piyush Goyal, the industry body said allowing such imports would undermine the significant gains made in building domestic capacity, generating employment, and attracting over ₹40,000 crore in investments since 2018, during which ethanol production capacity grew by more than 140 per cent. 

 

“If imports of ethanol for fuel is allowed then it would dilute the significant gains made in domestic capacity building, investment, and job creation,” Isma had said in the letter.

 

Ethanol blending in petrol has reached 19 per cent and is on track to meet the 20 per cent target by the 2024-25 supply year, ending in October — one year ahead of schedule. Isma said this progress has been made possible by favourable government policies and restrictions on fuel ethanol imports.