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Food vs Fuel: Recalibrating India's Ethanol Blending Strategy

Author

Listed:
  • Ashok Gulati

    (Indian Council for Research on International Economic Relations (ICRIER))

  • Tanmoy Adhikary

Abstract

The paper argues for a more adaptive and market-oriented approach to the ethanol blending policy. It recommends using sugar imports as an immediate buffer during shortages; limiting FCI rice largely to genuine surplus stocks while moving its pricing closer to at least the acquisition cost; making feedstock allocation responsive to agricultural conditions; greater openness to feedstock and ethanol imports. Most importantly, it calls for an India-specific well-to-tank assessment of sugarcane, maize and rice. A study that incorporates their full energy, environmental and economic costs, including implicit subsidies. Reforming distortionary input subsidies and allowing ethanol producers greater flexibility to choose feedstocks based on their true market costs could improve efficiency. In the longer term, second-generation ethanol from agricultural residues and other non-food biomass offers a way to expand ethanol use without intensifying the competition between food and fuel.

Suggested Citation

  • Ashok Gulati & Tanmoy Adhikary, 2026. "Food vs Fuel: Recalibrating India's Ethanol Blending Strategy," Indian Council for Research on International Economic Relations (ICRIER) Policy Paper 77, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    • Handle: RePEc:bdc:ppaper:77
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    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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