India Explores Ethanol Exports to Nepal and SAARC as Blending and Energy Strategy Expands

India is examining opportunities to expand ethanol trade beyond its borders, while also strengthening its domestic blending programme to support energy security and rural incomes, as per ANI report. 

Export Plans and Regional Demand 

CK Jain, President of the Grains Ethanol Manufacturers Association of India, said that discussions are underway with Nepal to supply ethanol as the country prepares to introduce 10% blending.  

He noted that Nepal currently lacks sufficient feedstock and processing capacity, making India a potential supplier until local infrastructure is developed. 

Jain said, “Nepal wants to start 10% blending… till their domestic industry is set up, they can start taking from India.” He added that similar opportunities are being explored across South Asian Association for Regional Cooperation member countries, which include Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. 

However, he highlighted that India does not currently permit exports of first-generation ethanol, though policy changes may be considered if demand from neighbouring countries increases. He said, “We are working on it to export to SAARC countries so that farmers will get benefited.” 

Economic Impact and Energy Substitution 

Jain emphasised that expanding ethanol production and trade could support the rural economy and reduce dependence on energy imports.  

 He said, “15–20% import substitution is definitely achievable,” indicating the potential role of domestic biofuels in reducing reliance on external energy sources. 

Under the current E20 blending framework, India saves around ₹40,000 crore annually in foreign exchange. He added that “around ₹40,000–50,000 crore is distributed in the rural economy through grain procurement.” 

With higher blends such as E85 and E100, savings could increase further, though not in a linear manner. Jain noted, “They could rise up to two-and-a-half times, with savings nearing ₹1 lakh crore at higher blending levels.” 

Blending Transition and Industry Readiness 

The transition towards higher ethanol blends will be gradual and involve a mix of fuel types. Jain said, “You cannot expect that all vehicles will be E85 or E100… on an average, 40–45% petrol can be replaced.” 

He pointed out that higher blends like E85 require flex-fuel vehicles and cannot be used in existing engines. “It will take time, maybe 2–3 years,” he said, adding that the government is in discussions with the Society of Indian Automobile Manufacturers and automobile companies regarding rollout timelines. 

Consumer awareness remains another challenge. Jain said, “Consumers are confused… technically, ethanol gives 1–2% lower mileage, but the benefits… are significant.” He also noted that pricing will be a key factor influencing adoption. 

Read More: Centre Proposes E100 Fuel Norms to Expand Ethanol Use in Transport! 

Conclusion 

India’s ethanol strategy is expanding across both domestic and regional dimensions, with exports, higher blending levels and industry readiness shaping the next phase of growth. 

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