India is considering a request from the United States to ease restrictions on ethanol imports as both countries continue negotiating a bilateral trade agreement. While the US seeks access for its corn-based ethanol for blending with gasoline, India currently permits ethanol imports only for non-fuel use and imposes high duties. Industry stakeholders in India warn that such concessions may threaten the country’s significant investments in domestic ethanol production.
The US is pushing for the inclusion of corn-based products like ethanol and dried distillers’ grains in any trade deal with India. This comes at a time when ethanol production from sugarcane in India has fallen behind that from grains for two years in a row. Oil Marketing Companies (OMCs) have allocated over 9.96 billion litres of ethanol for supply this year, with two-thirds expected to come from grain-based production.
Amid this debate, US President Trump claimed India offered to eliminate all tariffs on American goods—a claim swiftly countered by Indian Foreign Minister S. Jaishankar. Commerce Minister Piyush Goyal is currently visiting the US for further negotiations. High-level lobbying by American farm interests continues to pressure Indian policymakers to open its massive consumer market to US agricultural exports.