India Sells 6.35 Million Tonnes of Rice for Ethanol Production

The Government of India supplied approximately 6.35 million tonnes of rice, valued at ₹14,596.78 crore, to ethanol distilleries between June 2025 and June 2026. The Ministry of Food and Public Distribution informed the Rajya Sabha that the Food Corporation of India sold this rice at prices between ₹2,250 and ₹2,320 per quintal, roughly 40% below the average acquisition cost of ₹3,719.72 to ₹3,889.46 per quintal.

Despite the pricing gap, the government stated that no subsidies were extended to producers because sales adhered to the fixed prices of the open market sale scheme (domestic). This initiative supports the Ethanol Blended Petrol Programme, which achieved a 20% ethanol mix in petrol by July 2025. Between 2014-15 and May 2026, the program reportedly saved over ₹1.90 lakh crore in foreign exchange and generated more than ₹1.6 lakh crore for farmers.

Minister of State for Food Nimuben Jayantibhai Bambhaniya testified to Parliament that using surplus broken rice for ethanol is not driving food inflation, as feedstock is only allocated after ensuring buffer stocks and fulfilling National Food Security Act obligations. Maize has since become the primary feedstock, with 13.1 million tonnes used in the 2024-25 supply year. Meanwhile, the government penalized and barred two distilleries from further allocations after detecting irregularities and the diversion of rice consignments.