Ethanol Blending in India: Navigating the Dual Crisis of Energy Security and Climate Commitments

India faces a dual crisis: an oil import dependency of 87.7% costing $137 billion annually, and binding climate commitments including a 47% emission intensity reduction target and net zero by 2070. The transport sector, which accounts for 14% of India's total emissions and 58-60% of imported crude oil consumption, sits at the centre of both crises. This policy brief examines ethanol blending as a policy instrument positioned to address both simultaneously. Drawing on official government data, a peer-reviewed study by IIM-A and the Potsdam Institute (Jha et al., 2026), and the Parliament statement of July 20, 2026, the brief analyses the advantages and challenges of India's Ethanol Blending Programme, which achieved its 20% blending target in 2025, five years ahead of schedule. While the programme has delivered $19.3 billion in forex savings and a net reduction of 832 lakh metric tonnes of CO2 emissions, it presents serious trade-offs in food security, water stress, and land use. This brief argues that the path forward lies not in retreating from ethanol blending, but in accelerating the transition from first-generation sugarcane-based ethanol to second-generation agricultural waste-based ethanol. Five policy recommendations are proposed to address the structural challenges while preserving the programme's strategic benefits.