Profit push. Oil marketing companies have issued tenders for 1,050 crore liters of ethanol for ESY 2025-26, with supply schedules varying throughout the year.
In India’s villages, a quiet change is underway. It is not driven by slogans or short-term plans, but by a sustained change in how we look at agriculture, energy and rural livelihoods. Ethanol is often discussed in technical terms, carbon reduction, blending targets or oil import savings. But for millions of farmers and rural families, ethanol means something much more concrete: stable income, local jobs, and the possibility of building a future without leaving home.
We have witnessed this change closely in our units. When an ethanol plant is installed near an agricultural field, it does more than convert crops into fuel. It becomes a local economic support. Farmers find a reliable market for their produce, transportation and logistics businesses emerge, and skilled jobs are created within the community. The most important thing is that the wealth remains in the villages instead of moving to the cities.
Over the past decade, India’s ethanol program has transferred over ₹1.07 lakh crore directly to farmers. This is not an abstract figure, it represents school fees paid on time, reduced debt, improved nutrition and reinvestment in farming. By creating predictable demand for crops such as corn and sugarcane co-products, ethanol has protected farmers from sharp price fluctuations in long-defined agricultural markets.
The rise of maize provides a powerful example. A few years ago, maize was often a distressed crop, sold at throwaway prices. Today, due to demand for ethanol, farmgate prices have almost doubled, from about ₹12 per kg to ₹23 per kg. This change has helped many farmers improve their income by up to 18 percent compared to traditional sales channels. Equally important, it has given farmers the confidence to plan, invest and think ahead to the next crop. The impact of the ethanol economy doesn’t stop at the farm gate.
One of the biggest challenges facing rural India is crisis migration. Young people leave their villages not because they want to, but because opportunities are scarce. Ethanol plants are beginning to reverse this trend. Every one crore liter of ethanol produced creates about 290 direct jobs and more than 1,200 indirect jobs. These are not seasonal farming roles but year-round roles in operations, quality control, engineering, logistics and maintenance.
create ripple effect
These jobs matter because they are local and skilled. They allow rural youth to earn a steady income while staying close to their families. Over time, this creates a ripple effect. As wages are spent in nearby markets, small businesses from grocery stores to transportation operators become stronger. The same rupee circulates multiple times in the local economy, making villages more resilient to economic shocks. Ethanol also encourages diversification in agriculture. Instead of being limited to a single crop or buyer, farmers now have multiple ways to reach markets.
Crop residues and by-products that once had little value are now economically useful. This not only improves farm income but also reduces wastage and supports more sustainable farming practices.
Nationally, benefits increase dramatically. By achieving 20 per cent ethanol blending target (E20) in 2025, India has saved an estimated ₹1.44 trillion in foreign exchange. Every liter of ethanol blended into fuel is one liter of imported crude oil replaced by a home-grown and processed product. This strengthens India’s energy security while reducing the risk of global price volatility.
a growth engine
This dual effect makes ethanol particularly powerful. It addresses climate goals while delivering economic justice. It reduces emissions and import dependence, but at the same time, it creates livelihoods where they are needed most. Few policy instruments manage to bridge sustainability and inclusion so effectively. We see ethanol not just as a fuel, but as a growth engine.
Each plant represents a long-term partnership with farmers, local workers and communities. It represents the belief that development does not need to be centralized to be efficient, and that rural India does not need charity, it needs opportunity. India’s ambition to become an energy leader cannot be built only in urban centers or corporate offices. It must be rooted in the rural areas, where the raw materials, workforce and resilience of the nation truly lie. By turning agricultural surplus into high-value renewable energy, ethanol proves that national progress can start at the grassroots level.
The story of ethanol is essentially a human story. It is about farmers achieving stability, youth finding respect in local work and villages becoming places of opportunity rather than departure. As India moves forward on its energy and development journey, ethanol offers a powerful lesson: change happens when policy aligns with people. And when our farms power our fuel, they also power the future of rural India.
The author is vice president of All-India Distillers Association (AIDA)
Published on February 14, 2026
