USGC, USDA explore future of ethanol exports to India

By U.S. Grains Council | November 20, 2017

The U.S. Grains Council recently participated in a USDA agricultural trade mission to India, led by new Undersecretary of Trade and Foreign Agricultural Affairs Ted McKinney. As part of that mission, the council led an ethanol delegation that included council members and ethanol industry association leaders.

India was the third largest market for U.S. ethanol exports in 2016/2017, totaling 510 million liters (nearly 135 million gallons), an 80 percent increase over the year prior. In terms of value, ethanol represented the third largest U.S. agricultural export product to India.

“India has significantly greater potential for total ethanol usage, but current policies constrain the opportunity for India to meet the higher blend rates set forth in their national policy," said Brian Healy, USGC manager of ethanol export market development.

India’s government has proposed blend rates of up to 20 percent. Yet, current policies restrict the import of ethanol destined for fuel use, relying instead on domestic supplies of sugarcane to produce ethanol for fuel and importing U.S. ethanol only for industrial use. As a result, the blend rate has only reached a nationwide average of E3.3.

As part of the USDA mission, the council focused on expanding current partnerships built over 20 years of work with the Indian feed, starch, energy and dairy industries as well as advancing trade policy relationships supporting ethanol for fuel use. That effort included reaching out to new partners across those industries and ministries at the state and central government levels in India.

“Policy with a role for trade is a model that works globally,” Healy said. “A number of markets have ambitious mandates fulfilled by local production and, when needed, imports in order to achieve the maximum air quality, e environmental and economic benefits."

The delegation also continued to elevate interest in U.S. distillers dried grains with solubles (DDGS). The Indian market has the potential to import more than 700,000 metric tons of U.S. DDGS annually, but technical barriers exist. The Council continues to work with the industry and USDA to address these barriers and open this large potential market to U.S. exports.

Learn more about the Council’s work in India here.