Drought Threatens India's Ethanol Blending Targets Amid Weak Monsoon
Drought Threatens India's Ethanol Blending Targets Amid Weak Monsoon
IN · Published Nov 4, 2026
• India's ethanol blending rate for gasoline is expected to drop to 15%-17% in the 2026-27 supply year due to the weakest monsoon in over a decade.
• The rainfall deficit, linked to the El Niño weather pattern, has caused a 13% reduction in monsoon rains, severely impacting sugarcane and maize crops.

Impact & Risks

The reduced ethanol blending rate could increase India's reliance on fuel imports, reversing gains made in reducing oil-import costs. The surge in food prices, including a 7.74% retail food inflation rate in September, poses significant challenges for the world's most populous nation. The prioritisation of food security over biofuel production highlights the strain on agricultural resources, with potential long-term impacts on farmers and the economy. Additionally, the limited availability of maize for ethanol production could affect other industries reliant on this crop, such as animal feed production.

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