February 19, 2025
India Ethanol Market

India Ethanol Market Is Projected To Driven By Need For Blending Ethanol In Petrol

The Indian ethanol market has been growing rapidly over the past few years driven by the Government of India’s mandatory ethanol blending targets which aims to reduce oil import dependency and emissions. Ethanol is traditionally blended with petrol in India. Ethanol can be produced from sugarcane molasses as well as crops like corn, cassava and sweet sorghum. It is a clean source of energy as its combustion releases less greenhouse gases than petrol. The blending of ethanol with petrol also improves engine performance.

The India Ethanol Market is estimated to be valued at US$ 2.43 Bn in 2023 and is expected to exhibit a CAGR of 15% over the forecast period 2023-2030, as highlighted in a new report published by CoherentMI.

Market Key Trends:

The key trend in the India ethanol market is the increasing production capacities of ethanol manufacturers to meet the growing blending targets. The Government of India has progressively increased the ethanol blending targets from 5% initially to 20% by 2025. To achieve this target, ethanol production capacities need to increase substantially. Major ethanol producers in the country have invested billions of dollars in the last few years to ramp up production. For instance, Balrampur Chini Mills Ltd. doubled its ethanol production capacity to 1,150 kilolitres per day. Bajaj Hindusthan and Dwarikesh Sugar Industries also expanded capacities. The higher blending targets and production capacities are expected to drive significant growth in the India ethanol market over the forecast period.

Porter’s Analysis:

Threat of new entrants: The threat of new entrants is moderate as setting up an ethanol manufacturing plant requires substantial capital investment and technology. However, growing demand and government support in the form of subsidies and policy changes is encouraging new players to enter the market.

Bargaining power of buyers: The bargaining power of buyers is moderate. The demand for fuel-grade ethanol mainly comes from oil marketing companies and sugar companies. Switching costs are low.

Bargaining power of suppliers: The bargaining power of suppliers is low to moderate. The key raw material for fuel-grade ethanol is molasses which is readily available from sugar companies in India. Alternative suppliers of molasses provide low bargaining power to suppliers.

Threat of new substitutes: The threat of substitutes is low as there are limited alternatives to fuel-grade ethanol for blending with gasoline. However, with more focus on electric vehicles, the threat may increase in the long run.

Competitive rivalry: The competitive rivalry is high due to the presence of a large number of players. Companies compete based on pricing, product differentiation, production capacity, and geographic reach.

India Ethanol Market Segmentation:

  • By Source:
  • Molasses
  • Sugar Cane Juice
  • Grains
  • Others
  • By End Use:
  • Fuel
  • Industrial Solvents
  • Beverages
  • Cosmetics
  • Pharmaceuticals
  • Automotive
  • Others
  • By Grade:
  • Denatured Alcohol
  • Undenatured Alcohol
  • Rectified Spirit
  • Specially Denatured Alcohol
  • Fuel Ethanol
  • By Blending:
  • E5
  • E10
  • E15
  • E20
  • E25
  • E70
  • E85
  • E95
  • By Application Method:
  • Starch-based
  • Sugar-based
  • Cellulosic

Key Takeaways:

The India Ethanol Market Size is estimated to be valued at US$ 2.43 Bn in 2023 and is expected to exhibit a CAGR of 15% over the forecast period 2023-2030

The India Ethanol Market is expected to witness high growth. The market is dominated by players based in northern and western regions such as Uttar Pradesh, Maharashtra, and Karnataka due to availability of key raw materials. Regional demand is highest in these states supported by government initiatives and policies promoting ethanol blending.

Key players operating in the India Ethanol Market are Piccadily Sugar & Allied Industries Ltd., Thiru Arooran Sugars Ltd., Ugar Sugar Works Ltd., Dhampure Speciality Sugars Ltd., Praj Industries, Triveni Engineering & Industries Ltd, E.I.D. Parry (India) Ltd., DCM Shriram Ltd., Mawana Sugars Ltd., Uttam Sugar Mills Ltd., Kothari Sugars And Chemicals Ltd., Avadh Sugar & Energy Ltd., The Ugar Sugar Works Ltd., Dwarikesh Sugar Industries Ltd., K.M.Sugar Mills Ltd., Shree Renuka Sugars, Balrampur Chini Mills Ltd., Bajaj Hindusthan Sugar Ltd., Dalmia Bharat Sugar and Industries Ltd., Dhampur Sugar Mills Ltd. These major players are focusing on capacity expansion as well as geographical expansion to tap the growth opportunities.

*Note:
1.Source: CoherentMI, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it

Money Singh
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Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. 

Money Singh

Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. 

View all posts by Money Singh →