India May Need to Ban Sugar Export if it Decides to Allow Higher Ethanol Blending Above 20% Level
New Delhi: If India wants to allow higher ethanol blending with petrol by increasing E20 level, the country will have to ban sugar export, BMI, a unit of Fitch Solutions, has said in a report on ‘outlook for sugar prices’, reported The Hindu Businessline.
“India, having achieved E20, appears increasingly likely to pursue a further expansion of its ethanol mandate. While India has capacity for further ethanol expansion, realising it will require the country to further restrict sugar exports, weighing on global supply and underpinning prices at the margin,” says the report.
At present the Indian ethanol industry is lobbying for a higher blending beyond 20%. The banning of sugar export could also potentially help the government to control domestic prices when global rates are predicted to jump in April-June quarter.
When Sujata Sharma, joint secretary in the Petroleum Ministry was asked on Monday (April 6) about any plan to raise the ethanol blending with petrol (EBP) beyond 20%, the official declined to comment and said, "As of now it stands at 20 per cent.”
Earlier, back in 2022-23, India had faced a sugar shortage as a result export being restricted and despite a bumper output in 2023-24, no shipment was permitted.
The Businessline report cited industry sources who said that the government is concerned about Rs 16,918 crore of sugarcane dues (to be paid to farmers by mills) which have accumulated till end of March in current crushing season that started from October 1, 2025.
“Though 84% of Rs 1.07 lakh crore of dues has been cleared by mills, the arrear in terms of the absolute number is still a concern, when there is scope for getting more ethanol from sugar factories,” said an industry official, reported Businessline.
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