India supplied 895 crore litres of ethanol by the end of August 2026 under the Ethanol Supply Year (ESY) 2025-26, with grain-based feedstocks accounting for nearly 70 per cent of cumulative volumes, according to data released by the All India Distillers' Association (AIDA). The figure represents approximately 85 per cent of the 1,048 crore litres contracted for the period — a milestone that underscores the rapid scaling of India's domestic ethanol ecosystem.

Feedstock Breakdown

Of the total 895 crore litres supplied, grain-based feedstocks contributed 624 crore litres, while sugar-based feedstocks accounted for 271 crore litres. Among grain sources, maize emerged as the single largest contributor at 345 crore litres. Surplus rice procured from the Food Corporation of India (FCI) supplied 214 crore litres, and damaged food grains added another 64 crore litres.

Within the sugar segment, sugarcane juice led with 149 crore litres, followed by B-heavy molasses at 107 crore litres and C-heavy molasses at 15 crore litres.

What AIDA Said

Bharati Balaji, Deputy Director General of AIDA, noted that the dominance of grain-based sources — particularly maize and surplus FCI rice — reflects the strategic diversification of India's ethanol supply chain. 'The diversity of feedstocks strengthens India's ethanol programme by allowing the industry to utilise multiple domestic agricultural resources,' she said.

AIDA characterised the data as evidence of a maturing supply ecosystem that is progressively reducing dependence on any single feedstock pathway — a structural resilience that earlier, sugar-centric blending rounds lacked.

The Demand Challenge Ahead

Despite the supply-side progress, AIDA flagged a growing concern: as domestic ethanol production capacity continues to expand, ensuring adequate and predictable demand avenues will become increasingly critical. The association warned that supply growth could outpace current absorption channels if new end-use markets are not developed in parallel.

Notably, this concern is expected to intensify as India moves beyond the current ethanol-blending programme for petrol and seeks to scale ethanol utilisation across flex-fuel vehicles (FFVs), compressed biogas (CBG), sustainable aviation fuel (SAF), and other industrial applications.

Broader Context

India's push to blend 20 per cent ethanol with petrol by 2025-26 — a target set under the national biofuel policy — has driven rapid capacity addition across distilleries over the past four years. The shift toward grain-based feedstocks, particularly maize, has been a deliberate policy lever to reduce sugar-sector volatility and deploy surplus agricultural produce. This is the first ESY where grain sources have so decisively outpaced sugar-based supply — marking a structural shift in the programme's feedstock architecture.

With blending targets already close to achievement, the next phase of India's ethanol ambition hinges on diversifying into aviation and mobility fuels, where demand frameworks are still being formulated.