India's Shift to Corn Ethanol Production Leads to Import Dependency

India, Asia's leading corn exporter, has turned into a net importer for the first time in decades with its push to promote corn-based ethanol. This shift is placing significant strain on local poultry producers and disrupting global supply chains. The demand for imports surged after India increased procurement prices for corn-based ethanol in January to reduce the share of sugarcane ethanol in gasoline. The government is promoting ethanol to reduce emissions and ensure a favorable sugar supply for the domestic market. This indicates that India is likely to become a permanent net importer of corn. Due to rising feed costs that heavily burden local producers, India's poultry farmers are demanding the abolition of import tariffs and the lifting of the ban on genetically modified (GM) corn. Without imports, domestic production could not meet the demand. Traditional export markets like Vietnam, Bangladesh, Nepal, and Malaysia are now sourcing corn from South America and the United States due to high prices in India. India previously exported 2 to 4 million tons of corn, but exports are expected to drop to 450,000 tons in 2024, while imports are set to rise to 1 million tons, primarily from Myanmar and Ukraine. India's goal to increase the ethanol content in gasoline to 20% by 2025 has quadrupled corn usage for ethanol, leading to an internal struggle for corn supply among poultry farms, starch companies, and ethanol distilleries. Small farmers are forced to cut back their production or use alternative feed to reduce costs, while Indian corn imports surged massively in the first half of 2024, and exports declined sharply. The rising demand has driven up prices in Myanmar, making farms profitable, while imports from Ukraine are duty-free under tax concessions due to its classification as a semi-developed country. Therefore, India's corn imports will be necessary in the future to meet the rising demand.