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This report summarizes the findings of the Asian Development Bank's technical assistance project TA-7250: Cross- Sectoral Implications of Biofuel Production and Use in India. Implementation of its national biofuel policy will help offset the effects of oil price increases on the economy of India in the next 2 decades. The advantages of biodiesel, as a supply-side response to counter the adverse impacts, are significant. Bioethanol, in contrast, will not generate sufficient economic benefits to justify social costs. Therefore, first-generation bioethanol has limited scope in India. As these biofuels compete for agricultural resources and compromise food security, a combination of policies–biodiesel expansion, energy efficiency improvements, and food productivity increase–will provide India with better energy security, food security, and opportunities for inclusive growth and carbon emission reduction.

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