India's maize-based ethanol push raises import dependence

India's effort to reduce dependence on imported crude oil is leading to a new dependency on imported maize, a commodity the country exported until recently. The government's ethanol blending programme, aimed at producing E20 fuel—a mix of 80% petrol and 20% ethanol—has increased demand for maize as a feedstock. However, the cost of producing and using this fuel has not dropped in line with crude oil prices, which have fallen in recent months. Even with the impact of the West Asia crisis, a litre of crude oil costs the country around ₹55, according to government figures quoted in Lok Sabha. In comparison, the government buys maize-based ethanol at a fixed ₹71.86 per litre, the highest rate paid for any feedstock. The high cost is driven by the low yield of Indian maize, insufficient capacity to absorb the demand for ethanol, and the need to balance domestic sugar consumption with exports. This situation has turned India from an exporter of maize into a net importer, as the demand for ethanol feedstock outpaces domestic supply.