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By:

Sagari Gupta

24 March 2026 at 2:16:04 pm

From Green Fuel to Strategic Fuel

India’s ethanol revolution will succeed only if its costs are shared more fairly. On June 13, Union Minister Nitin Gadkari approved regulations giving E100 fuel legal status in India. The move does more than add two new fuel grades to India’s pumps. It marks the evolution of ethanol from a green fuel and sugar-surplus solution into a strategic fuel designed to reduce India’s exposure to external energy shocks. For over a decade, the older version of the ethanol programme delivered real,...

From Green Fuel to Strategic Fuel

India’s ethanol revolution will succeed only if its costs are shared more fairly. On June 13, Union Minister Nitin Gadkari approved regulations giving E100 fuel legal status in India. The move does more than add two new fuel grades to India’s pumps. It marks the evolution of ethanol from a green fuel and sugar-surplus solution into a strategic fuel designed to reduce India’s exposure to external energy shocks. For over a decade, the older version of the ethanol programme delivered real, measurable gains. Union Minister for Petroleum and Natural Gas Hardeep Singh Puri said on June 4 that the ethanol blending programme has saved India Rs. 1.84 lakh crore in foreign exchange and added Rs. 1.58 lakh crore to farmers’ earnings since 2014-15, while substituting 302 lakh metric tonnes of crude oil and cutting 909 lakh metric tonnes of CO2 emissions. The new policy answers a harder question. India imports around 85 percent of its crude oil requirements. Tensions around the Strait of Hormuz, through which about a fifth of the world’s oil moves, keep reminding policymakers what that dependence costs. Gadkari has put India’s annual fossil fuel import bill at roughly Rs. 22 lakh crore, near $250 billion at current exchange rates. Every litre of ethanol that replaces imported crude is a small subtraction from that bill and a small addition to India’s room to manoeuvre when oil prices spike. That logic is sound. The fairness of the transition is a separate question. Uneven Costs Energy security is a public good: a steadier rupee, lower inflation and reduced reliance on oil exporters benefit the entire economy. Yet the costs are far less evenly shared. The immediate winners are sugar-producing states, distilleries and the government, which enjoys a lower import bill and greater diplomatic flexibility. Nor is the environmental case as straightforward as the carbon figures suggest. Producing a litre of sugarcane-based ethanol requires about 2,860 litres of water, according to NITI Aayog. Most ethanol comes from sugarcane and maize grown in Maharashtra, Uttar Pradesh and Punjab - states already overexploiting groundwater. Ethanol is also competing with food and feed. Maize prices have risen as distilleries compete with the poultry industry, while India has shifted from being a maize exporter to an importer. The Centre for Study of Science, Technology and Policy estimates that meeting ethanol targets by 2030 could require additional maize acreage equivalent to a quarter of India’s farmland. In Rajasthan’s Tibbi, farmers have already protested against a new ethanol plant. A cleaner path exists. Second-generation ethanol made from paddy straw, sugarcane bagasse and other crop waste does not compete with food or fresh water the same way first-generation ethanol does. India has a handful of 2G plants running, including one at Panipat, but high capital costs and slow technology adoption keep them marginal next to sugarcane and grain-based ethanol. E85 and E100 need flex-fuel vehicles built for higher ethanol shares. Maruti Suzuki and Hero MotoCorp have begun rolling out flex-fuel models, but as of April this year no automaker had a vehicle commercially available that ran on E85, and Maruti’s own flex-fuel prototype only appeared in June. Neither company has disclosed what the flex-fuel variants will cost against standard petrol models. The fuel itself is cheaper at the pump. Delhi’s first E85 station, opened on June 5 at Indian Oil’s Pusa Road outlet, priced the fuel at Rs. 82.12 a litre, about Rs. 20 below regular E20 petrol. But ethanol carries less energy than petrol, and E85 cuts mileage by 20 to 35 percent compared with petrol. A cheaper litre that takes you fewer kilometres is not automatically a cheaper kilometre. Gadkari has asked the finance ministry to cut GST on E85 from 18 percent to 5 percent, which would help close that gap. The GST Council has not decided yet, and its decision in the coming weeks will tell us whether the government means to share the cost of this transition or leave it with early adopters. There is a fiscal cost behind the consumer one. Oil marketing companies are set to pay farmers close to Rs. 40,000 crore in 2025 alone under the blending programme, on top of the subsidies and soft loans that prop up ethanol distilleries. Infrastructure tells a similar story. The government’s rollout plan covers Delhi-NCR and the Mumbai-Pune-Nagpur corridor first, with a target of 500 E85 outlets by December 2026 and 5,000 by the end of 2027. A household outside those corridors that buys a flex-fuel vehicle today pays for infrastructure it cannot yet use. This is where the comparison with E20 matters. The earlier blending programme spread its costs thinly across every petrol buyer in the country, through a few percentage points of ethanol nobody had to think about or pay extra for. E85 and E100 work differently. They ask a smaller group of early adopters to absorb a vehicle upgrade, a pricing gap and an infrastructure lag all at once, in exchange for a national benefit every taxpayer will eventually share. Fairer Transition None of this is an argument against E85 and E100. India needs to cut its dependence on imported crude, and ethanol is the most realistic domestic substitute on the table right now. The environmental costs of first-generation ethanol are real too. The question is who absorbs its costs, and what kind of ethanol pays for it. The transition can be made fairer in four ways: extend any GST cut on E85 to flex-fuel vehicles; link vehicle sales to the availability of E85 pumps; require automakers to disclose price premiums and real-world mileage; and shift more incentives towards second-generation ethanol that does not strain water tables or food supplies. For a decade, India’s ethanol programme delivered foreign-exchange savings and higher farm incomes without imposing visible costs on consumers or water-stressed regions. E85 and E100 change that equation. They turn a public good - energy security - into an upfront private cost borne first by households and farming regions, while the wider benefits are shared by the country as a whole. (The writer is an independent public policy researcher. Views personal.)

What the World Can Learn from India’s 1971 War

Our country’s conduct in the 1971 War with Pakistan offers several lessons at a time when the principles of peaceful coexistence and a rules-based global order are in freefall.

History shows that any war in the Middle East has a way of expanding beyond its declared aims. The ongoing confrontation involving the U.S.-Israel and Iran, now stretching into its second month, has already outgrown its immediate theatre, unsettling energy markets, rattling allies and inviting a familiar contest of narratives. Washington and Jerusalem have framed their case in moral and strategic terms that an oppressive regime in Tehran must be checked, its nuclear ambitions curtailed and its people, in time, empowered. Iran, unsurprisingly, casts the conflict as naked aggression, a violation of sovereignty dressed up as ‘liberation.’


Between these competing claims lies a question as old as statecraft itself: when, if ever, does intervention become justifiable? And more pointedly, who decides? The answers are rarely neat. Iran’s post-1979 history is replete with episodes of domestic unrest over elections, economic malaise, and social restrictions, particularly those affecting women. Protests have often been met with repression. Yet the existence of internal dissent, however grave, does not furnish an uncomplicated mandate for external military action. If it did, the modern world would be in a state of near-permanent war.


Responsible Conduct

This is where historical analogy, used carefully, can illuminate rather than obscure. India’s intervention in the subcontinent in 1971, culminating in the birth of Bangladesh, offers one such lens. It is frequently invoked in Indian discourse, sometimes too readily, but its particulars are instructive. The crisis in what was then East Pakistan was not merely a matter of internal dissent. It had spiralled into a humanitarian catastrophe, sending millions of refugees across the border into India, straining its economy and destabilising its eastern flank. The Pakistani military’s crackdown on Bengali civilians, widely documented at the time, lent urgency to India’s case.


New Delhi’s response was neither impulsive nor cloaked in abstraction. It combined diplomatic outreach, humanitarian concern and, ultimately, military action. Crucially, India’s support for the Mukti Bahini (local Bangladeshi resistance fighters) was embedded in a broader objective which was to end a crisis that had direct consequences for its own stability. The war that followed was short, decisive and, by the standards of interstate conflict, unusually clear in its outcome. Within weeks, Pakistani forces surrendered, and a new state emerged.


It is tempting, particularly for those sympathetic to Western aims in Iran, to draw a straight line between 1971 and the present. Are not the stated objectives similar - liberation from oppression, support for local agency, the promise of a better political order? Yet such parallels, while superficially appealing, elide critical differences. India’s intervention was preceded by months of restraint and diplomatic effort. It was anchored in an immediate and overwhelming refugee crisis. And it was bounded by a clear end-state: the cessation of violence and the establishment of a sovereign Bangladesh, not the indefinite remaking of a distant polity.


Equally important was what India did not do. It did not seek to occupy territory beyond the conflict’s objectives, nor did it attempt to extract sweeping political concessions from a defeated Pakistan. The release of tens of thousands of prisoners of war, without maximalist bargaining, has often been criticised in hindsight as naïve. But it also underscored a broader point: that the war’s purpose was not expansionist, even if it yielded significant strategic dividends, including the partition of a hostile neighbour.


Moral Clarity

Such clarity of purpose is conspicuously absent in many contemporary interventions. From Iraq to Afghanistan, and now in the shadow of a possible escalation with Iran, the line between stated aims and underlying motives has often blurred. Energy security, regime change, regional dominance - these are seldom absent from the calculus, even when cloaked in the language of democracy and human rights. The result is a pattern of selective idealism: indignation in one theatre, indulgence in another; a hard line on proliferation here, a studied silence there.


India, to its credit, has largely avoided this trap in its external posture, even if not always to universal approval. Its current stance on the Iran conflict - urging de-escalation while refraining from outright condemnation or mediation - has drawn criticism at home, particularly from opposition parties. Yet this position is consistent with a long-standing principle: that bilateral conflicts are best resolved by the parties involved, without unsolicited third-party intervention. It is a principle India has guarded jealously in its own disputes, and it would be incongruous to abandon it now for rhetorical satisfaction.


Domestic critics, especially those invoking the moral clarity of 1971, would do well to acknowledge these nuances. The intervention under Indira Gandhi is rightly remembered as decisive and, in many respects, just. But it was also exceptional in that it was a convergence of humanitarian urgency, strategic necessity and political will. To treat it as a universal template for intervention risks oversimplifying both the past and the present.


Marked Restraint

For the wider world, the lessons are more sobering. The first is restraint. India’s record, notwithstanding periodic tensions, has been marked by a reluctance to initiate conflict. This has not insulated it from criticism, but it has lent credibility to its actions when it has chosen to act. The second is consistency. A foreign policy that aligns rhetoric with action and eschews the temptation to apply principles selectively, commands a different kind of authority, one that is in short supply in today’s fractured order.


The third, and perhaps most elusive, is clarity of purpose. The 1971 war had a defined objective and, just as importantly, a defined end. It did not metastasise into an open-ended project of nation-building or ideological transformation. Contrast this with the protracted conflicts of the 21st century - from war in Afghanistan to the ongoing Russia–Ukraine War - where shifting goals and uncertain exits have imposed staggering costs without commensurate gains.


As the Middle East edges deeper into uncertainty, such distinctions matter. Calls for regime change, however justified they may appear, carry consequences that extend far beyond their immediate targets. They risk entrenching the very instability they seek to resolve, particularly when unaccompanied by a credible plan for what follows.


The principle of sovereignty, much invoked and often breached, remains a cornerstone of the international system. Yet it is not absolute. The challenge lies in navigating the narrow space between non-interference and necessary action - a task that demands not just power, but prudence. India’s experience in 1971 does not offer a ready-made blueprint. But it does provide a reminder that interventions, to be legitimate and effective, must be grounded in necessity, executed with restraint, and concluded with clarity.


In an era of convenient moralities and elastic principles, that is lesson enough.


(The writer works in the Information Technology sector. Views personal.)

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