India expands biofuel tax benefit for ethanol and vegetable oils

India, the world's third-biggest oil importer and consumer, has been particularly keen to rein in its oil import Reuters

India has expanded the excise duty exemption for biofuels to encourage the blending of higher proportions of ethanol and components of vegetable oil with gasoline and diesel, a government order said.

India, the world's third-biggest oil importer and consumer, has been particularly keen to rein in its oil import bill since the conflict in Ukraine spurred a surge in global crude prices.

The tax exemption will be applicable to an ethanol portion of 12%-15% blended with gasoline, up from 10% previously. For diesel, the exemption will apply to a 20% portion of alkyl esters of long chain fatty acids obtained from vegetable oils, the order said.

India plans to introduce 20% ethanol blending with gasoline in some parts of the country from April next year, followed by a nationwide roll out from 2025/26.