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The Future of Mobility in India: A Call for Sustainable Solutions

India’s mobility transition is at a defining inflection point—where climate urgency, rural upliftment, and energy self-reliance intersect. Road transport contributes ~12% of energy-related CO₂ emissions, while vehicular pollution accounts for nearly one-fifth of PM2.5 levels in urban centres like Delhi. At the same time, India’s crude oil import dependency has risen to 88.2% in FY25, costing over $137 billion and exerting pressure on the economy and forex reserves.

Navigating these intertwined challenges demands a strategic, multi-dimensional approach. India’s vast and diverse transport ecosystem—with its varied geographies, vehicle segments, and infrastructure readiness—cannot be decarbonised through a singular technology or policy lever.

While electric vehicles (EVs) have gained ground in urban centres, supported by enabling policies and charging infrastructure, they remain out of reach for much of semi-urban and rural India. Here, ethanol emerges as a practical, scalable solution—compatible with existing infrastructure and especially suited for the internal combustion engines (ICEs) that still dominate India’s roads. 

The future of Indian mobility is not about choosing EVs over ICEs but integrating both to meet the country’s unique sustainability and energy goals. Unlike Western countries focused primarily on electrification, India must adopt a multi-modal approach, leveraging flexible-fuel vehicles (FFVs) alongside EVs to address the diversity of its vast mobility landscape.

Ethanol: A Proven, Scalable Clean Fuel

India’s ethanol blending journey has seen extraordinary progress. As of April 2025, the national blending rate reached 19.7%, with a cumulative average of 18.6% from November 2024 to April 2025. States like West Bengal, Haryana, Kerala, and Punjab are nearing the 20% target. From just 38 crore litres in 2013–14 to over 477 crore litres blended between November and April of ESY 24-25, the scale-up reflects systemic alignment between government, industry, and infrastructure.

More than 17,400 fuel stations now dispense E20, and 400 cater to E100-compatible vehicles. Ethanol has not only saved ₹1.26 lakh crore in foreign exchange but also generated ₹1.07 lakh crore in additional income for farmers since the adoption of ethanol blending. This transition is not just about fuel—it’s about supporting rural livelihoods, strengthening India’s agricultural economy, and securing energy independence.

Progress has been driven by coordinated action across the value chain. Oil marketing companies ramped up blending capacity, sugar mills invested in multi-feed distilleries, and automakers aligned engine technologies with E20 standards. Still, challenges remain—particularly around feedstock diversification, infrastructure scale-up, and price rationalisation. However, significant strides were made in building the supporting infrastructure — from ethanol transport and blending to storage— enabling the rapid scale-up we witness today.

The government’s commitment to multi-modal clean mobility is evident in the ₹10,900 crore PM E-Drive Scheme (Oct 2024–Mar 2026), aimed at deploying 24 lakh electric two-wheelers, 3.15 lakh three-wheelers, and 14,000 electric buses, along with incentives for electric ambulances and trucks. Yet, policymakers recognise that EVs alone cannot decarbonise India’s vast transport sector. A dual-track policy is needed to ensure both electric vehicles and biofuels evolve together, addressing diverse mobility needs.

Road Beyond E20

As India stands at the cusp of completing Phase 1 of its ethanol blending journey, the Government is now looking beyond 20% target. A multi-ministerial committee has been formed to chart this roadmap. In response, the sugar and ethanol industry has proposed a future-ready strategy—promoting co-use of E100 with E20 and accelerating adoption of Flex-Fuel Vehicles (FFVs), Hybrid Electric Vehicles (HEVs), and ethanol-compatible platforms.

This roadmap is built on three pillars: demand-side incentives like including 5% GST on FFVs and differential ethanol pricing; supply-side expansion through a ₹35,000 crore interest subvention scheme to add 770 crore litres of capacity; and carbon pricing reform linking ethanol rates to sugarcane FRP.

Scaling this vision will require raising production capacity from current 1,683 crore litres to 2,362 crore litres by 2030–31. The Indian automobile sector is stepping up, with SIAM committed to launching at least one FFV two-wheeler and one passenger car by FY26. As India evaluates higher blends like E85 and E100—already in use in countries like Brazil and the US—fuel property differences such as higher octane, lower energy content per litre, and greater corrosiveness require careful calibration.

Indian agencies and automakers are actively studying these aspects. Early trials in India, along with global flex-fuel experience, show that with proper engine modifications, vehicles can run efficiently on E85/E100. However, widespread adoption hinges on scaling fuel infrastructure—now at over 17,000 E20 stations and 400 E100 pumps—and sustained automaker readiness

Roadblocks to Overcome

India’s ethanol blending success stems from strong policy backing, which must continue through clear mandates and sustained incentives to unlock further potential. Regulatory reforms such as easing licensing norms for new distilleries, standardizing fuel quality, offering tax breaks, and enabling carbon market participation will be crucial to scale supply.

Meanwhile, the sugar industry awaits a long-overdue revision in ethanol rates to reflect the recent hike in sugarcane FRP to ₹355/quintal which have largely remained static for two years except a slight rise in C-heavy ethanol to ₹57.97/litre, placing operational and financial strain on the entire value chain, from maize and juice to rice-based variants.

The Path Forward

The next phase of India’s mobility transition demands collective efforts. Policymakers must fast-track E30, support FFVs development, and incentivise 2G ethanol and SAF. Industry must continue to invest, innovate, and expand feedstock capabilities. Automakers need to ensure engine compatibility, pilot FFVs models, and support testing.

Additionally, financial institutions should prioritise green financing and risk-sharing. And consumers must adopt E20, understand its benefits, and help drive the shift. With bold targets combined with smart policy and industry alignment, India is poised to lead a cleaner, greener, and self-reliant mobility revolution.

Tarun Sawhney is Vice Chairman and Managing Director at Triveni Engineering & Industries Ltd., and Chairman, CII National Council on Agriculture and Co-Chairman, CII National Committee on Bioenergy.Views expressed are the author’s personal.



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