Union Minister Nitin Gadkari has defended India’s ethanol-blending programme, arguing that the policy has created an additional market for agricultural produce while supporting diversification of the farm economy.
Speaking at the Bihar Investor Summit 2026 in Patna, Gadkari said around 40 million four-wheelers and 200 million two-wheelers had been operating on petrol blended with ethanol since 2022. He challenged claims that ethanol-blended petrol had caused vehicle damage and said leading automobile manufacturers had also tested vehicles running on higher ethanol concentrations, including 100% ethanol.
Gadkari’s comments come amid continuing discussion in India over vehicle compatibility with higher ethanol blends and the broader economic impact of the country’s ethanol programme.
Ethanol blending creates new market for farm produce
Gadkari said the decision to promote ethanol blending was intended not only to reduce dependence on conventional fuels but also to diversify agricultural production towards the energy sector.
He said corn-based ethanol production had generated additional earnings of up to ₹45,000 crore for farmers in Bihar and Uttar Pradesh. The figure was presented by Gadkari as the additional income generated for farmers following the expansion of corn-based ethanol production.
The minister argued that the development of an ethanol market gives farmers an additional outlet for agricultural produce beyond food applications.
The comments are particularly relevant to Bihar, where the development of maize-based ethanol has become part of the state’s broader investment and biofuel opportunity.
Gadkari cites vehicle experience with ethanol-blended petrol
Addressing concerns about the effect of ethanol-blended petrol on vehicles, Gadkari said four-wheelers and two-wheelers had been operating on blended petrol since 2022 without what he described as complaints of vehicle damage.
He also said major automobile manufacturers had tested vehicles using 100% ethanol.
These remarks represent Gadkari’s position on vehicle performance under ethanol-blended fuels and were made in the context of defending the government’s blending policy.
The minister linked the policy to India’s wider effort to reduce dependence on imported conventional fuels. He cited conventional fuel imports worth approximately ₹22 lakh crore as part of the rationale for expanding alternative fuels.
Rice straw highlighted as aviation-fuel feedstock
Gadkari also pointed to the development of aviation fuel from agricultural residues, citing rice straw as an example of how technology could create higher-value applications for biomass.
The reference highlights a broader area of India’s bioenergy strategy: converting agricultural residues into fuels rather than treating them solely as waste.
Gadkari has previously highlighted the potential of agricultural-residue-based biofuels and waste-to-energy technologies, including the conversion of rice straw into bio-CNG.
For states such as Bihar, where agricultural residues are available at scale, the development of technologies capable of converting biomass into transport fuels could create additional value chains alongside grain-based ethanol.
Water grid proposed alongside biofuel agenda
Gadkari also used the investor summit to propose a broader water-management strategy for Bihar, including a water-grid system, river-basin water transfers, dredging and protective infrastructure.
He suggested that a water grid modelled on national highway and electricity grids could help redistribute excess water between river basins and manage flood risks. He also proposed river dredging, with silt potentially being used as construction material for highways.
The minister said deeper water channels created through embankments or protective walls could additionally support inland water transport and reduce logistics costs.
The water-management proposals were part of Gadkari’s wider pitch for infrastructure development and investment in Bihar rather than a direct component of the ethanol programme.
Bioenergy Business Analysis
Gadkari’s comments highlight the multiple policy objectives behind India’s ethanol programme: reducing fossil-fuel dependence, creating additional agricultural markets and expanding domestic biofuel production. The reported ₹45,000 crore farmer-income figure, however, is a statement made by the minister and should be treated as an attributed estimate rather than an independently established measure of total farmer income gains.
The emphasis on corn is also significant for India’s ethanol market. As the feedstock mix expands beyond sugarcane and molasses, grain-based ethanol creates additional demand for maize while linking agricultural production more closely with fuel markets. This can benefit farmers and distilleries, but it also makes feedstock availability, prices and food-versus-fuel considerations important factors for the sector.
The rice-straw aviation-fuel reference points to another stage of India’s biofuel development: moving beyond conventional ethanol and exploring higher-value fuels from agricultural residues. Commercial viability will depend on feedstock collection, logistics, conversion efficiency, technology readiness and fuel certification.
For Bihar, the combination of grain-based ethanol, agricultural-residue conversion and waste-to-energy technologies could broaden the state’s bioenergy value chain. The investor summit therefore placed biofuels within a wider development narrative in which agriculture, energy, waste management and infrastructure are increasingly interconnected.
