India Ethanol Market Size, Share, Growth Analysis 2032
India Ethanol Market Size and Forecast (2025 - 2032), By Feedstock (Molasses, Grains, Sugar Beet, Others), By Grade (Fuel Grade, Industrial Grade, Food Grade), By Production Process (Fermentation, Synthetic), By Application (Fuel & Fuel Additives, Food & Beverages, Industrial Solvents, Pharmaceuticals), By End-Use Industry (Automotive, Food & Beverage, Pharmaceutical, Personal Care & Cosmetics), and Country.
Market Overview:
“The India ethanol market is expected to reach a high CAGR of 5.2% over the Forecast Period 2025-2032, reaching a value of INR YY billion by 2032.”
North India dominates the market, accounting for 35% of the national share. Key metrics include rising demand for biofuels, increasing government support for ethanol blending, and growing applications in the pharmaceutical and personal care industries.
The Indian ethanol market is expanding rapidly, owing to the government's ambitious ethanol blending program and an increased emphasis on reducing reliance on fossil fuels. As a critical component of the country's plan to attain energy security and reduce carbon emissions, ethanol production and use are expanding rapidly across multiple industries.
India Ethanol Market Dynamics:
Market Trend: Rapid expansion of grain-based ethanol production capacity
The Indian ethanol market is shifting significantly towards grain-based ethanol production, mainly from maize and rice. This tendency stems from the government's emphasis on diversifying feedstock sources and lowering reliance on molasses-based ethanol.
According to data from the Indian Sugar Mills Association (ISMA), grain-based ethanol production capacity grew by 40% in the 2022-23 season compared to the previous year. The proportion of grain-based ethanol in the total ethanol supply for blending with petrol increased from 10% in 2020-21 to 25% in 2022-23. This rapid rise is fuelled by government incentives and laws that encourage the establishment of grain-based distilleries. For example, the government approved 131 grain-based ethanol projects in 2022, with a total capacity of 5.85 billion liters per year.
Market Driver: Government's ambitious ethanol blending targets and supportive policies
The Indian government's demand for more ethanol blending in fuel is a major driver of the ethanol market. The National Biofuel Policy 2018, which established a target of 20% ethanol blending by 2025 (E20), was a major changer for the industry. According to recent Ministry of Petroleum and Natural Gas figures, India will achieve 10% ethanol blending in petrol in June 2022, five months ahead of plan. This result has increased confidence in meeting the E20 objective by 2025. To help achieve this goal, the government has implemented a number of incentives, including interest subsidy programs for ethanol production projects and feedstock-based ethanol pricing. These initiatives have resulted in a large rise in ethanol production capacity, with the country's installed capacity reaching 8.3 billion litres in 2023, up 65% from 2020 levels.
Market Restraint: Feedstock availability and price fluctuations
Despite its development prospects, the Indian ethanol sector confronts problems such as feedstock availability and price instability. Because of its reliance on agricultural feedstocks, ethanol production is subject to crop yields and weather conditions. During the 2022-23 sugar season, poor sugarcane production in key states caused a temporary molasses scarcity, impacting ethanol production. Furthermore, the diversion of food grains for ethanol production has prompted worries about food security and price inflation in staple cereals.
Segment Overview:
The fuel & fuel additives segment dominates the India ethanol market, accounting for over YY% of the total demand.
The fuel and fuel additives section of the Indian ethanol market has grown at an exponential rate, owing to the government's ethanol blending scheme. According to recent data from the Ministry of Petroleum and Natural Gas, ethanol use for blending with petrol reached 4.5 billion litres in the 2022-23 ethanol supply year, up 35% over the previous year. This increase is mostly due to the extension of the Ethanol Blended Petrol (EBP) program across the country.
Over the last year, major oil marketing corporations (OMCs) have dramatically expanded their ethanol acquisition for blending. For example, in 2022-23, Indian Oil Corporation, the country's largest fuel retailer, reported a 40% rise in ethanol blending volumes over the previous year. This rise in demand has resulted in significant investments in ethanol production capacity, with numerous new distilleries coming on line.
The industrial solvents industry is also expanding rapidly, especially in the pharmaceutical and personal care industries. According to recent industry data, the use of ethanol in hand sanitisers and disinfectants increased by 200% in 2020-21 as a result of the COVID-19 epidemic, and demand remains high. The pharmaceutical industry's ethanol consumption for solvent applications increased by 15% in 2022-23, owing to the rise of India's drug manufacturing sector.
Regional Outlook:
North India leads the Indian ethanol market, with a market share of YY% in 2023.
North India's supremacy in the ethanol industry can be ascribed to its abundant sugarcane supply, substantial grain farming, and numerous distilleries. Uttar Pradesh, India's largest ethanol-producing state, makes a substantial contribution to regional leadership. According to figures from the Uttar Pradesh Cane Development Department, the state's ethanol production capacity increased by 25% in 2022-23 over the previous year.
The region has experienced a significant increase in new ethanol facilities, notably grain-based distilleries. In 2022, the government approved 47 grain-based ethanol projects in North India with a total capacity of 2.2 billion litres per year. This expansion is projected to strengthen the region's position in the national ethanol market.
West India, particularly Maharashtra and Gujarat, has seen a major increase in ethanol output. Maharashtra, the second-largest producer of ethanol after Uttar Pradesh, increased output by 20% in 2022-23. The state government's aggressive initiatives, such as incentives for establishing ethanol plants, have contributed to this expansion.
The ethanol market in South India, dominated by Karnataka and Tamil Nadu, has benefited from the region's abundant sugarcane supply and built distilleries. Karnataka reported a 30% increase in ethanol production during 2022-23, owing to the expansion of existing distilleries and the activation of new plants.
Competitive Intelligence:
The Indian ethanol market is made up of major integrated sugar mills, standalone distilleries, and new entrants focused on grain-based ethanol generation. The market is moderately fragmented, with the top ten producers accounting for roughly YY% of total production capacity.
Leading sugar mills with integrated distilleries have a competitive edge thanks to their reliable molasses supply and established infrastructure. These companies are boosting their investments in capacity expansion and technology upgrades to improve efficiency and fulfil rising ethanol demand. For example, a major sugar producer estimated a 50% increase in ethanol production capacity in 2022-23 as a result of brownfield expansions and debottlenecking at existing plants.
New entrants, notably in the grain-based ethanol category, are gaining pace as a result of government subsidies and efforts to diversify feedstocks. Several oil and gas corporations have announced ambitions to build large-scale grain-based ethanol plants, leveraging their experience in fuel delivery and blending.
Partnerships and partnerships are developing as major market tactics. Oil marketing organisations are signing long-term ethanol supply agreements with producers to assure a consistent supply for the blending program. Furthermore, technical agreements with multinational corporations for sophisticated ethanol production techniques are becoming more widespread.
The market has also witnessed a greater emphasis on sustainability and circular economy principles. Several producers are investing in technologies to use agricultural wastes and waste materials for ethanol production, which is consistent with the government's emphasis on second-generation (2G) ethanol.
Analyst Opinion:
The Indian ethanol sector is at a key juncture, set for tremendous expansion thanks to strong government support and growing environmental awareness. The ambitious E20 aim has resulted in a strong demand outlook, giving investors long-term visibility.
An expanding market trend is the integration of ethanol production with other value-added products. Several producers are looking at the possibility of bio-refineries to produce ethanol and other high-value chemicals, maximizing feedstock value and improving overall economics.
The change to grain-based ethanol is expected to affect market dynamics, potentially resulting in a more geographically diverse production landscape. However, this transformation must be carefully managed to strike a balance between food security and energy output.
As the market grows, there is a greater demand for technological advancements that enhance manufacturing efficiency and lower prices. Investments in advanced fermentation technologies, enzyme development, and process optimization are expected to play a critical role in the market's growth.
The success of the ethanol blending program could pave the way for further research into other biofuels and alternative energy sources, establishing India as a global leader in the renewable energy transition.
Major Players:
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Bajaj Hindusthan Sugar Ltd.
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Shree Renuka Sugars Limited
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Balrampur Chini Mills Limited
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India Glycols Limited
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Dhampur Sugar Mills Limited
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Triveni Engineering & Industries Ltd.
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Godavari Biorefineries Ltd.
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Praj Industries Limited
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DCM Shriram Industries Limited
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Bharat Petroleum Corporation Limited (BPCL)
Key Developments:
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August 2023: Praj Industries Limited opened India's largest syrup-based ethanol facility in Uttar Pradesh, with a daily capacity of 500 kilolitres.
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In November 2023, Indian Oil Corporation announced intentions to build a 500 kilolitre per day grain-based ethanol plant in Chhattisgarh as part of its drive to secure ethanol supply for blending.
1. INTRODUCTION
1.1. Market Definitions & Study Assumptions
1.2. Market Research Scope & Segment
1.3. Research Methodology
2. EXECUTIVE SUMMARY
2.1. Market Overview & Insights
2.2. Segment Outlook
2.3. Region Outlook
3. COMPETITIVE INTELLIGENCE
3.1. Companies Financial Position
3.2. Company Benchmarking -- Key Players
3.3. Market Share Analysis -- Key Companies
3.4. Recent Companies Key Activities
3.5. Pricing Analysis
3.6. SWOT Analysis
4. COMPANY PROFILES (Key Companies list by Country) (Premium)
5. COMPANY PROFILES
5.1. Bajaj Hindusthan Sugar Ltd.
5.2. Shree Renuka Sugars Limited
5.3. Balrampur Chini Mills Limited
5.4. India Glycols Limited
5.5. Dhampur Sugar Mills Limited
5.6. Triveni Engineering & Industries Ltd.
5.7. Godavari Biorefineries Ltd.
5.8. Praj Industries Limited
5.9. DCM Shriram Industries Limited
5.10. Bharat Petroleum Corporation Limited (BPCL)
(*LIST NOT EXHAUSTIVE)
6. MARKET DYNAMICS
6.1. Market Trends
6.1.1. Rapid expansion of grain-based ethanol production capacity
6.1.2. Integration of ethanol production with other value-added products
6.1.3. Increasing focus on sustainability and circular economy principles
6.2. Market Drivers
6.2.1. Government's ambitious ethanol blending targets and supportive policies
6.2.2. Rising demand for biofuels and renewable energy sources
6.2.3. Growing applications in pharmaceutical and personal care industries
6.3. Market Restraints
6.3.1. Feedstock availability and price fluctuations
6.3.2. Concerns over food security due to diversion of food grains for ethanol production
6.4. Market Opportunities
6.5. Porter's Five Forces Analysis
6.5.1. Threat of New Entrants
6.5.2. Bargaining Power of Buyers/Consumers
6.5.3. Bargaining Power of Suppliers
6.5.4. Threat of Substitute Products
6.5.5. Intensity of Competitive Rivalry
6.6. Supply Chain Analysis
6.7. Value Chain Analysis
6.8. Trade Analysis
6.9. Pricing Analysis
6.10. Regulatory Analysis
6.11. Patent Analysis
6.12. SWOT Analysis
6.13. PESTLE Analysis
7. BY FEEDSTOCK (MARKET SIZE/VALUE (INR Bn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2025-2032)
7.1. Molasses
7.1.1. B-heavy molasses
7.1.2. C-heavy molasses
7.2. Grains
7.2.1. Maize
7.2.2. Rice
7.2.3. Other grains
7.3. Sugar Beet
7.4. Others
7.4.1. Sugarcane juice
7.4.2. Sweet sorghum
8. BY GRADE (MARKET SIZE/VALUE (INR Bn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2025-2032)
8.1. Fuel Grade
8.2. Industrial Grade
8.3. Food Grade
9. BY PRODUCTION PROCESS (MARKET SIZE/VALUE (INR Bn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2025-2032)
9.1. Fermentation
9.1.1. Batch fermentation
9.1.2. Continuous fermentation
9.2. Synthetic
9.2.1. Ethylene hydration
9.2.2. Other synthetic processes
10. BY APPLICATION (MARKET SIZE/VALUE (INR Bn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2025-2032)
10.1. Fuel & Fuel Additives
10.1.1. Ethanol blending in petrol
10.1.2. Flex-fuel vehicles
10.2. Food & Beverages
10.2.1. Alcoholic beverages
10.2.2. Food processing
10.3. Industrial Solvents
10.3.1. Paints and coatings
10.3.2. Printing inks
10.4. Pharmaceuticals
10.4.1. API manufacturing
10.4.2. Excipients
11. BY END-USE INDUSTRY (MARKET SIZE/VALUE (INR Bn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2025-2032)
11.1. Automotive
11.1.1. Passenger vehicles
11.1.2. Commercial vehicles
11.2. Food & Beverage
11.2.1. Alcoholic beverage manufacturers
11.2.2. Food processors
11.3. Pharmaceutical
11.3.1. Drug manufacturers
11.3.2. Contract manufacturing organizations
11.4. Personal Care & Cosmetics
11.4.1. Skincare products
11.4.2. Haircare products
12. REGION (MARKET SIZE/VALUE (INR Bn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2025-2032)
12.1. North India
12.1.1. Uttar Pradesh
12.1.2. Punjab
12.1.3. Haryana
12.1.4. Other North Indian states
12.2. South India
12.2.1. Karnataka
12.2.2. Tamil Nadu
12.2.3. Andhra Pradesh
12.2.4. Other South Indian states
12.3. East India
12.3.1. West Bengal
12.3.2. Odisha
12.3.3. Bihar
12.3.4. Other East Indian states
12.4. West India
12.4.1. Maharashtra
12.4.2. Gujarat
12.4.3. Rajasthan
12.4.4. Other West Indian states
*NOTE: All the regions mentioned in the scope will be provided with (MARKET SIZE/VALUE (INR Bn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2025-2032)
By Feedstock:
- Molasses
- Grains
- Sugar Beet
- Others
By Grade:
- Fuel Grade
- Industrial Grade
- Food Grade
By Production Process:
- Fermentation
- Synthetic
By Application:
- Fuel & Fuel Additives
- Food & Beverages
- Industrial Solvents
- Pharmaceuticals
By End-Use Industry:
- Automotive
- Food & Beverage
- Pharmaceutical
- Personal Care & Cosmetics
By Region:
- North India
- South India
- East India
- West India
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