The ethanol production industry in India has attained significance in recent years largely due to the rising prices of international crude oil. With the country being mostly dependant on import of crude oil, fuel-based ethanol is fast developing as a viable alternative. Ethanol is basically produced through fermenting molasses, which are by-products of sugar. As the government is keen on developing ethanol as a fuel-based alternative to crude oil, it is providing a lot of incentives to farmers for the purpose of sugarcane cultivation. With large amounts of fertile, uncultivated land area and availability of cheap labour, India has sufficient potential for sugarcane and subsequently, ethanol production. However, there are a number of problems in commercial ethanol production in India. The sugarcane industry is mainly dominated by unorganised players. The taxation policy on pricing of ethanol products is also complicated and varies on a state-wise basis. Moreover, not all distilleries are capable of producing commercial fuel-based ethanol. The need of the hour is more government support and incentives for the development of this crucial industry sector. Hide this