India turns record rice harvest into ethanol as part of efforts to cope with surplus grain supplies and drive ahead with biofuel targets. With record rice output and other major feedstocks such as sugarcane coming under stress from drought, the government is resorting to rice to achieve its ambitious targets for blending ethanol.
India Pours Record Rice Crop Into Ethanol: The Background
After experiencing rice deficits in earlier years because of low monsoons, India is now dealing with the opposite problem—a surplus. This year’s monsoon has been bountiful, resulting in a bumper rice crop estimated at approximately 149 million metric tons. India’s rice stock on June 1 stood at 59.5 million tons, much higher than the government’s buffer level of 13.5 million tons.
In response to these grain levels, India’s state-run Food Corporation of India (FCI) has allocated a record 5.2 million tons of rice for making ethanol. This is a huge increase from the less than 3,000 tons that were made available last year.
India Pours Record Rice Crop Into Ethanol: Supporting Energy Goals
India, being the third-largest oil importer in the world, has been pushing an ambitious ethanol blending scheme to cut fossil fuel dependence. The goal is to blend 20% ethanol in petrol by the period of 2025–26. Through last month, the nation had already achieved 19.8%, driven mainly by higher ethanol production out of rice.
Sugarcane has traditionally dominated as the feedstock of choice in India for ethanol. But due to recent droughts, sugarcane production has fallen, prompting a revisiting of supply chains. Rice, in its abundance, proved to be a viable substitute.
India Pours Record Rice Crop Into Ethanol: Market Impact
Utilizing greater amounts of rice as fuel has kept tremendous pressure off of other cereals such as corn, which experienced price jumps and importation booms in past years, respectively. Ethanol manufacturers generally use a rotation between rice, corn, and beet grains depending on the cost-benefit.
This diversification has supported stable grain markets with assurance of energy requirements being fulfilled. Rice-based ethanol continues to be plagued with cost issues, though. For instance, FCI retails rice at ₹22,500 per ton, whereas ethanol prices quoted by oil companies (₹58.5/litre) leave little profit margin for distillers.
India Pours Record Rice Crop Into Ethanol: Industry Perspectives
Industry specialists are divided. Arushi Jain of the Grain Ethanol Manufacturers Association said still more rice would be used to make ethanol if rice prices were reduced or ethanol purchase prices increased. Akshay Modi, one of the largest ethanol makers, agreed, adding that existing margins prevent growth in rice-based ethanol production.
At the same time, rice exporters are paying close attention. While export curbs were removed earlier this year, India has been exporting huge amounts overseas— an estimated 22.5 million tons in 2025, up 25% from a year ago. However, with India already accounting for 40% of rice exports worldwide, there’s not much headroom to increase without spilling over into international markets.
India Pours Record Rice Crop Into Ethanol: The Bigger Picture
This action is a tightrope walk between the promise of food security and the goal of renewable energy. An official of the government noted that the feeding of the people is still the priority, but the utilization of surplus as fuel prevents wastage and lightens storage loads.
With yet another bumper crop on the cards for October, there’s an increasing opinion that even more rice will be channeled into ethanol during the next marketing year. Analysts such as Himanshu Agrawal, of Satyam Balajee Exports, caution that selling the entire surplus in the market will prove hard—leaving ethanol conversion an increasingly inevitable outlet.
Conclusion: A Strategic Shift for Grain and Energy Sectors
India dumps a record rice harvest into ethanol, not out of desperation but because of strategic imperatives. As climate patterns change, crop yields and energy requirements shift; such policy adjustments are crafting India’s economic and environmental destiny. The success of this program might serve as a global template in food surplus versus renewable energy demand.
