Ethanol Surplus of Nearly 7 Billion Litres Reported
India is facing an ethanol surplus of nearly 7 billion litres that has not yet found buyers, The Economic Times reported on 27 September 2026. The report signals that domestic offtake channels — primarily the blended fuel programme — may be absorbing less than the volume now being produced, prompting producers to search for alternative markets. No official government figure, company name or export destination was cited in the published headline.
The development adds a layer of commercial uncertainty to a sub-sector that has seen sustained capital investment in new and expanded distillery capacity across several Indian states over recent years. For distillery project stakeholders in India, the supply-demand imbalance raises questions about offtake security for facilities still in planning or under approvals.
Scale of the Project Pipeline
Projects India tracks 1,667 live projects in the Distilleries and Breweries sub-sector. Twenty-five projects were added to the tracked database in the last 90 days alone, indicating that investment commitments have continued to flow into the sector even as the surplus has grown.
A stage-by-stage breakdown of those projects illustrates where risk and opportunity are concentrated:
| Project Stage | Number of Projects |
|---|---|
| Under Approvals | 609 |
| Completed | 359 |
| Construction Started | 256 |
| Hold | 142 |
| Approvals Received | 139 |
| Planning | 59 |
The 609 projects under approvals and the 139 that have received approvals but not yet broken ground together represent a substantial volume of capacity that has not yet been committed to construction. Whether promoters proceed at pace, slow timelines, or shift to hold status may depend partly on how quickly the surplus finds a market.
Geographic Distribution of Tracked Projects
The pipeline is concentrated in a small number of states. Maharashtra leads with 498 tracked projects, followed by Karnataka with 238, Uttar Pradesh with 215, Madhya Pradesh with 93, Andhra Pradesh with 65 and Bihar with 64. These six states account for the majority of tracked investment activity in the sub-sector.
The geographic spread reflects both the availability of agricultural feedstock — sugarcane in Maharashtra and Karnataka, grain in Uttar Pradesh and Bihar — and state-level policy environments that have encouraged distillery licensing. A wider discussion of where ethanol plant investment stands across India sets out additional context on the pipeline.
Sample of Recently Tracked Projects
Among the projects added or updated recently in the Projects India database, several carry disclosed investment values that illustrate the scale of individual commitments entering the pipeline:
| Project | Promoter | Location | Value | Stage |
|---|---|---|---|---|
| Distillery Mfg Unit — Expansion | Shri Balaji Sugars and Chemicals Private Limited | Vijayapura, Karnataka | Rs 829 crore | Hold |
| Distillery Unit — Expansion | Inamdar Sugars Limited | Belgaum, Karnataka | Rs 672 crore | Under Approvals |
| Grain Based Distillery Plant — Expansion | Assago Industries Private Limited | East Godavari, Andhra Pradesh | Rs 270 crore | Under Approvals |
| Distillery Unit — Expansion | Karnal Cooperative Sugar Mills Limited | Karnal, Haryana | Rs 263 crore | Under Approvals |
| Grain-Based Distillery — New | Shreevash Agro India Private Limited | Balangir, Odisha | Rs 175 crore | Under Approvals |
| 2G Ethanol Biorefinery | Spray Engineering Devices Limited | Amroha, Uttar Pradesh | Rs 150 crore | Construction Started |
Notably, two of the highest-value projects tracked — worth Rs 829 crore and Rs 672 crore respectively — are currently on hold or pending approvals in Karnataka, which may reflect promoter caution in the current market environment.
What this means for suppliers and contractors
For equipment suppliers, civil contractors and engineering firms active in the distillery space, the reported surplus introduces a distinction between projects that are proceeding and those that may be paused. The 142 projects currently categorised as on hold, alongside the 609 under approvals, represent a segment of the pipeline where final investment decisions have not been taken. Suppliers would be advised to prioritise engagement with the 256 projects already in construction and the 139 that have received approvals, where procurement activity is most likely to be active.
Geographically, Maharashtra and Karnataka together account for nearly half of all tracked projects, making them the primary markets for distillery-related equipment and services. Uttar Pradesh, with 215 tracked projects and active construction underway — including the 2G Ethanol Biorefinery at Dhanaura — remains a significant market for grain-based distillery equipment.
If the ethanol surplus persists, the proportion of projects moving from the approvals stage to construction may slow, extending the pre-construction sales window for suppliers but also deferring confirmed order flow. Contractors tendering on industrial projects in India should monitor stage movements in the tracked pipeline closely. There are currently no open India tenders recorded for Industrial Projects in the Projects India database.
Full details on tracked projects in this sub-sector are available at the Projects India project directory.
Frequently asked questions
How large is India's ethanol surplus as reported in 2026?
The Economic Times reported on 27 September 2026 that India faces an ethanol surplus of nearly 7 billion litres without an identified market. No official government figure or breakdown by state or feedstock type was included in the published report.
How many distillery projects are currently tracked in India?
Projects India tracks 1,667 live distillery and brewery projects across India. Of these, 609 are under approvals, 256 are in construction, 359 are completed, and 142 are on hold, as of the latest available data.
Which states have the most distillery projects in India?
Maharashtra leads with 498 tracked distillery projects, followed by Karnataka with 238, Uttar Pradesh with 215, Madhya Pradesh with 93, Andhra Pradesh with 65, and Bihar with 64, according to Projects India data.
Are there open tenders for distillery or industrial projects in India?
The Projects India database currently records no open India tenders in the Industrial Projects sector, which covers Distilleries and Breweries. Suppliers should monitor the live tenders page for updates as new procurement activity is listed.
