India has significantly expanded its ethanol manufacturing capacity over the past decade, with current distillation capacity reaching 2,019 crore litres per annum. This is nearly twice the approximately 1,040 crore litres of ethanol supplied to state-run Oil Marketing Companies (OMCs) during the Ethanol Supply Year (ESY) 2024-25, which ran from November 1, 2024, to October 31, 2025, according to government data. The substantial increase in capacity reflects the rapid expansion of India’s ethanol blending programme and growing investment in ethanol production infrastructure.
India Has 478 Ethanol Manufacturing Units
According to the latest official data submitted by Minister of State for Petroleum Suresh Gopi in Parliament on August 3, India currently has 478 ethanol manufacturing units across 22 states. The capacity expansion represents a major transformation in India’s ethanol industry. In fact, the country had significantly lower ethanol production capacity and blending levels just over a decade ago.
Ethanol Capacity Has Expanded Rapidly Since 2014
A December 20, 2024 statement from the Ministry of Consumer Affairs, Food and Public Distribution highlighted the scale of India’s ethanol capacity growth. Until 2014, molasses-based distilleries had a combined ethanol distillation capacity of less than 200 crore litres. During ESY 2013-14, ethanol supplies to OMCs stood at only 38 crore litres, while the ethanol blending level was just 1.53%. However, policy interventions over the past decade have accelerated investment in both molasses-based and grain-based ethanol production.
By November 30, 2024, capacity had increased to approximately:
941 crore litres from molasses-based distilleries
744 crore litres from grain-based distilleries
This rapid expansion has helped establish a much stronger domestic ethanol supply base.
Maharashtra Leads India’s Ethanol Production
Maharashtra currently has the largest number of ethanol-producing distilleries in India, with 145 units. Uttar Pradesh follows with 79 units, while Karnataka has 50.
Other major ethanol-producing states include:
Madhya Pradesh – 27 units
Punjab – 25 units
Bihar – 22 units
Haryana – 19 units
Gujarat – 17 units
Andhra Pradesh – 16 units
Tamil Nadu – 16 units
Chhattisgarh – 10 units
Telangana – 10 units
Meanwhile, several states have fewer than 10 ethanol distilleries. Odisha and West Bengal have eight units each, followed by Uttarakhand and Jharkhand with six each. Assam and Rajasthan have four units each, while Himachal Pradesh has three. Jammu and Kashmir, Meghalaya and Sikkim currently have one ethanol distillery each.
Maharashtra Also Has the Highest Ethanol Capacity
Maharashtra not only leads in the number of distilleries but also has the country’s highest annual ethanol distillation capacity at 389 crore litres. Uttar Pradesh ranks second with 344 crore litres, followed by Karnataka with 321 crore litres. Other states with substantial annual capacity include:
Madhya Pradesh – 131 crore litres
Punjab – 127 crore litres
Haryana – 99 crore litres
Bihar – 97 crore litres
Several other states have annual ethanol production capacities below 90 crore litres. These include Andhra Pradesh at 64 crore litres, West Bengal at 61 crore litres, Telangana at 57 crore litres, Chhattisgarh at 46 crore litres, Gujarat at 44 crore litres, Odisha at 42 crore litres and Uttarakhand at 42 crore litres.
Smaller States Continue to Build Ethanol Capacity
States with annual ethanol distillation capacity below 40 crore litres include Jharkhand at 36 crore litres, Tamil Nadu at 34 crore litres, Assam at 29 crore litres, Himachal Pradesh at 22 crore litres and Rajasthan at 21 crore litres. Meanwhile, Jammu and Kashmir has a capacity of 8 crore litres, Meghalaya 3 crore litres and Sikkim 2 crore litres. The distribution of capacity across 22 states highlights the growing geographical footprint of India’s ethanol industry.
Ethanol Blending Programme Supports Energy Security
The expansion of ethanol capacity has taken place alongside the rapid growth of India’s Ethanol Blended Petrol (EBP) programme. According to a July 5, 2026 background note from the Press Information Bureau (PIB), the expanding EBP programme has helped India reduce crude oil imports, conserve foreign exchange and lower greenhouse gas (GHG) emissions. At the same time, the programme has created new market opportunities for farmers and strengthened their incomes by generating additional demand for agricultural feedstocks used in ethanol production.
India’s Ethanol Industry Enters a New Phase
India’s ethanol sector has therefore undergone a significant transformation over the past decade. From less than 200 crore litres of molasses-based distillation capacity before 2014, the country now has 2,019 crore litres of total ethanol distillation capacity across 478 manufacturing units. As reported by thehindubusinessline.com, the capacity expansion provides India with a stronger foundation to support ethanol blending, enhance energy security and reduce dependence on imported crude oil.
