India is expected to produce 2.9 billion litres (766 million gallons) of ethanol in the 2015/16 financial year through March, marking a decline from 3.06 billion litres in the previous year.

The figure was announced by food minister Ram Vilas Paswan last week in a written reply to parliament, local media reported.

The expected 2015 volume is above the 2.72 billion litres produced in 2013/14 and in line with the 2.94-billion-litre output in 2012/13.

The minister noted that the government has increased the ethanol blending targets from 5% to 10% to promote the use of the green fuel. The government is also offering soft loans to sugar mills for establishing ethanol facilities equal to up to 40% of the project cost.

India produces its ethanol from molasses, a by-product of the sugar industry.

Provided by SeeNews exclusively for Essentica.