Modi’s biofuel promotion comes under pressure as Indian motorists protest

Published Sun Jul 5, 2026 · 2:52 p.m.

INDIAN motorists will gather in New Delhi on Sunday July 5, for the first major demonstration against a flagship biofuels program intended to reduce crude imports and support agricultural incomes.

The government’s accelerated shift to gasoline with a higher percentage of ethanol – a self-driving policy signed by Prime Minister Narendra Modi – has angered drivers, whose complaints include lower fuel consumption, higher maintenance costs and engine corrosion.

The government and automakers are on the defensive after weeks of complaints on social media. Authorities sought to contain the controversy by calling a news conference with auto industry executives on Saturday. Automakers have dismissed the complaints as unfounded.

“We are confident that we have not seen any glaring issues on social media that would warrant a rethink of the government’s biofuel blending program,” said Puneet Anand, associate vice president of Hyundai Motor India.

Speaking separately in Rajasthan, Oil Minister Hardeep Singh Puri accused vested interests of spreading misinformation.

The backlash comes as Modi seeks to expand one of his signature energy initiatives. India met its target of blending 20% ​​ethanol into gasoline five years ahead of schedule in 2025 and plans to increase that mandate further. Last month, state refiners also began selling gasoline containing 85% ethanol for flex-fuel vehicles.

Automakers said the E20 underwent extensive testing before its nationwide rollout. Vehicles designed for E20 have been on sale since 2025, while the fuel is also compatible with older E10 certified vehicles, said Rahul Bharti, executive director of Maruti Suzuki India.

Although fuel economy may decrease slightly, the tradeoff is outweighed by the fuel’s broader economic and environmental benefits, he said.

Manufacturers have also objected to specific claims circulating online. Vikram Gulati, country manager of Toyota Kirloskar Motor, said a widely shared case involving a Toyota Innova Hycross allegedly damaged by E20 was due to contaminated fuel rather than an ethanol blend.

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He also rejected claims that ethanol attracts ants, saying the smell of gasoline repels the insects.

However, for consumers, the biofuel debate comes as the costs of vehicle ownership continue to rise.

Gasoline prices remain near four-year highs following geopolitical disruption, while insurance premiums, toll charges, poor road conditions and monsoon-related damage have increased motorists’ costs, making concerns about fuel efficiency and maintenance more politically sensitive.

India’s demand for gasoline has grown faster than diesel consumption, increasing by an average of 8.8 percent annually over the past five fiscal years, compared with 5.5 percent for diesel, according to government data.

Gasoline accounts for about 18 percent of refined fuel sales, making the success of the ethanol program increasingly important to the government’s energy strategy.

The South Asian country is among several large emerging economies expanding the use of biofuels, a campaign that has accelerated in the wake of the war in Iran.

Indonesia is accelerating its plan to increase palm oil-based biodiesel blending to 50%. And the debate over biofuel mandates is intensifying in the United States, where some conservative groups are urging lawmakers to reduce blending requirements, arguing they increase costs for consumers.

Puri said on Saturday that any steps to increase ethanol blending from 20 to 25 percent would be undertaken only after rigorous testing and consultations with stakeholders.

He added that India’s strategy to diversify transport fuels would leverage several technologies, including biofuels, batteries and compressed natural gas. BLOOMBERG