Indian Distillery Industry Pushes for Tax Cuts on Flex-Fuel Vehicles Amid Ethanol Surplus

India's distillery industry calls for a reduction in GST on flex-fuel vehicles as the country grapples with a surplus of ethanol, having achieved its 20% blending target ahead of schedule. The All India Distillers' Association seeks policy clarity and GST cuts to facilitate the adoption of flex-fuel vehicles.

Amid an ethanol surplus, the Indian distillery sector is urging the government to decrease the GST on flex-fuel vehicles. The plea arises as India reached its 20% ethanol blending target, known as E20, five years ahead of its 2030 schedule.

Bharati Balaji, Director of the All India Distillers' Association (AIDA), highlighted the challenges of high production costs for flex-fuel vehicles compared to traditional combustion engines. The current GST rate for larger flex-fuel vehicles can reach up to 40%, which the AIDA proposes to reduce to boost consumer adoption.

Apart from tax cuts, the industry advocates for road tax exemptions and expanded ethanol dispensing infrastructure, drawing inspiration from Brazil's model. Discussions also considered expanding ethanol's role beyond road transport to sectors like maritime fuels, seeking robust policy support in light of evolving energy needs.