Gadkari pushes alternative fuels to cut India’s ₹22 trillion fuel import bill

India is looking to accelerate the production of alternative fuels and reduce dependence on imported fossil fuels as geopolitical developments expose the economy to volatility in global energy prices, road transport and highways minister Nitin Gadkari said on Monday.

India’s fossil fuel imports cost about ₹22 trillion annually, making energy security a major economic and environmental challenge, Gadkari said while speaking at ENRich 2026, a KPMG event.

The government is promoting indigenous, cost-effective and less-polluting energy sources, including ethanol, compressed biogas (CBG), hydrogen and biofuels, to reduce import dependence.

The push comes amid uncertainty in global energy markets, where crude oil prices and currency movements can raise India’s import bill and put pressure on domestic fuel prices.

“Diversification of agriculture towards the energy and power sector” has been a mission since 2004, Gadkari said, arguing that farmers should increasingly become producers of energy alongside food.

The government is exploring a broader range of fuel alternatives for transport, including ethanol-blended petrol, biofuel-blended diesel, sustainable aviation fuel and hydrogen-powered vehicles.

Gadkari said India’s experience with 20% ethanol-blended petrol, or E20, demonstrates the potential of alternative fuels to reduce dependence on crude oil. He said about 40 million four-wheelers and 200 million two-wheelers are using E20.

The government is also working towards higher ethanol usage through flex-fuel vehicles, which can operate on different proportions of ethanol and petrol. Gadkari said he would launch a Toyota Innova capable of running on 100% bioethanol this month. Major automobile manufacturers, including Tata Motors, Mahindra, Toyota, Suzuki and Hyundai, are developing flex-fuel vehicles.

“Market forces will decide which fuel is adopted. What is important is that the fuel is indigenous, affordable and available,” he said.

Beyond petrol, the government is exploring biofuels in diesel and aviation. The Automotive Research Association of India (ARAI) is conducting trials on a 15% isobutanol blend in diesel, Gadkari said. The trials aim to establish the technical feasibility of the blend, with test results awaited.

Jet fuel

The government is also looking at introducing a 2% biofuel blend in aviation turbine fuel (ATF), marking an initial step towards sustainable aviation fuel (SAF). Gadkari cited previous flights using biofuel blends and said India could gradually expand the use of sustainable aviation fuel.

Gadkari said the government is promoting CBG production from agricultural residue under its biomass-to-energy programme. The initiative aims to convert crop waste, including rice straw, into fuel while providing an alternative to stubble burning in Punjab and Haryana.

He said about 3,000 CBG plants have been registered under the scheme, of which around 280 have started operations. Five tonnes of rice straw can produce about one tonne of bio-CNG, while cotton straw and Napier grass can also be used as feedstock.

The minister said biotechnology and agricultural research could improve biomass productivity and methane yields, creating additional income opportunities for farmers.

Gadkari said waste segregation and bio-digestion could convert organic waste into methane, which can subsequently be used to produce CBG or hydrogen.

The government is also exploring the conversion of industrial emissions into useful products. Gadkari said research is underway to combine carbon dioxide with hydrogen to produce urea, potentially reducing India’s dependence on imported fertilizers.

He also highlighted the potential of bio-bitumen, made from agricultural residue, 7% waste plastic, and powder from used rubber tyres, to reduce dependence on imported petroleum-based bitumen used in highway construction. Almost 50% of bitumen used in the country is currently imported from Iran and other West Asian countries.

Gadkari identified green hydrogen, produced using renewable energy or biomass, as a key component of India’s future energy mix.

The government is working with automobile manufacturers and energy companies to develop hydrogen-powered trucks and buses. Gadkari said the ministry plans to introduce hydrogen filling stations along 10 highway routes to support trials involving heavy commercial vehicles.

He also highlighted the potential of electric vehicles, battery technology and renewable energy to reduce fossil fuel consumption. Declining lithium-ion battery costs and research into alternative battery chemistries could improve the affordability of electric mobility, he said.

The minister said solar-powered charging infrastructure and energy storage would be important in expanding electric vehicle adoption.

India’s broader objective, Gadkari said, is to transform itself from an energy importer into a producer of indigenous fuels and technologies.

He said alternative fuels could channel investment and employment towards rural, agricultural and tribal communities.

The shift would require collaboration among startups, research institutions, industry, and government to develop commercially viable technologies that can be scaled up across the country, he said.