India's Ethanol Shift: Fuel Gains, Food Strains

India's ethanol programme has saved over Rs 1.44 lakh crore in foreign exchange by August 2025. However, it is impacting food security as maize takes precedence over pulses and oilseeds. The programme's success is triggering competition for land resources vital for nutrition, urging a balance between energy and food needs.

India's ethanol-blended fuel initiative has saved the nation more than Rs 1.44 lakh crore in foreign exchange and replaced approximately 245 lakh metric tonnes of crude oil by August 2025, as reported by the Economic Survey. However, the rapid advancement of this programme reveals unforeseen repercussions. Government-driven pricing strategies that favour maize-based ethanol are prompting farmers to transition away from planting pulses and oilseeds, creating apprehensions about enduring food security and nutrition.

The scope of the ethanol programme now extends beyond traditional sugar-based feedstock, incorporating food grains, especially maize, in line with India's ambition to achieve its E20 blending target — combining 20% ethanol with petrol. Remarkably, maize yields have surged 48% since FY16, hitting 3.78 tonnes per hectare by FY25. Conversely, yields for soybeans, sunflower, rapeseed, peanuts, and millet have shown no significant improvement, or worse, have declined, according to the Survey.

This shift accentuates a critical conflict between energy self-reliance and food security, as noted in the Survey. With India's nutritional demands, there's growing concern that this transition could amplify dependence on edible oil imports and susceptibility to food price fluctuations. Experts advocate for a comprehensive strategy that harmonizes energy security with food priorities, possibly through enhanced pulse and oilseed yields and reducing market distortions for specific feedstocks.