Who Pays For E20's Hidden Costs?

India’s Ethanol Rollout Story Has A Growing Consumer Backlash

By Shubhangi Bhatia

What?

India's E20 (20% ethanol-blended) petrol mandate, rolled out nationwide, is triggering a consumer backlash, with mileage loss the central complaint. Owners report fuel economy dropping well beyond the 3-5% reduction the government has conceded, alongside some reports of stalling, corrosion, and injector faults.

Automakers and dealer bodies insist no case of E20-caused damage has been formally established, even as reports continue to surface across states and vehicle categories.

In Hisar, Yuvraj Taneja's Volkswagen Virtus stalled with an EPC warning, traced to a blocked injector, 20 days after a service. In Mumbai, Gigi Dcruz's Kia Sonet stopped minutes after refuelling. "I had to spend my entire day dealing with this, and pay to get the fuel drained, refilled, and the car towed," she told The Core. "The government should give consumers a choice in this, not mandate it."

Why?

The gap between official estimates and owner experience is stark. A LocalCircles survey found that 66% of petrol vehicle owners reported a mileage drop of over 10%, more than twice the government's figure.

53% rated the rollout "disastrous" or "ineffective," and 31% wanted the option to revert to E0 or E10, even at a higher cost.

Behind the numbers are owners absorbing real costs. Dibya R, a Royal Enfield rider in Bhubaneswar, saw his mileage fall from 40-41 kmpl to 36-39 kmpl and found rust inside his fuel tank. The dealership quoted Rs 19,000 for a replacement but wouldn't put the assessment in writing.

According to GoMechanic, older vehicles have components engineered for lower ethanol blends, and fuel filters and injectors may also need more frequent checks, since ethanol's cleaning properties can loosen deposits. A company spokesperson told The Core that fuel lines, rubber seals, gaskets, O-rings, and certain other fuel system components can see accelerated wear after prolonged exposure to higher ethanol concentrations.

However, Union Minister Nitin Gadkari has rejected the claims outright, saying, "I challenge anyone to show me a single petrol vehicle that has been corroded because of ethanol."

Why It Matters

Millions of vehicles bought under a now-defunct fuel standard are bearing mileage losses and repair bills. NITI Aayog had earlier recommended keeping E10 available for older vehicles, a call the rollout ignores.

India's choice-free rollout stands apart globally.

As Joshua Wycliffe of the Global Biofuel Alliance told The Core, "Brazil's success is rooted in consumer choice and pricing dynamics, as their market dynamically prices ethanol against gasoline, so consumers are economically incentivised to choose higher blends."

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India’s Export Slump Has A Climate Tech Fix Hiding In Plain Sight

By Ronak Sutaria

What? 

Economist Rajiv Kumar, former Vice Chairman of NITI Aayog, recently argued that India's export manufacturing is failing not for lack of policy attention, but for an unwillingness to commit to global competitiveness as the overriding objective. The numbers bear him out. 

Apparel exports, one of the largest employers in India's micro, small and medium enterprises (MSME) manufacturing base, in FY 2025-26 swung from 8.7% growth in April to a 17.1% contraction by February. Leather followed a similar trajectory. Textiles oscillated around zero for most of the year. 

These are not cyclical blips. They reflect a lack of competitiveness in the sectors that have historically absorbed the most workers and generated the most export volume for smaller manufacturers.

Climate tech is an area where India is well-positioned to define global standards. At a per capita income of $3,000 (roughly Rs 2.86 lakh), with 65% of the population living on less than $3 a day (under Rs 290), India cannot afford a growth model that concentrates gains in capital-intensive sectors. 

The country needs labour-intensive manufacturing at scale — competing in global markets — to absorb the tens of millions of workers transitioning out of agriculture. ClimateTech, built right, can be that sector.

How? 

The specific opportunity lies in emissions monitoring and air quality technology: a sub-sector where India already has engineering depth and a fast-growing global addressable market, but where self-defeating regulation has kept the country a captive importer of Western solutions rather than a competitive exporter of its own. That is the problem more fixable than it looks.

The global market for environmental monitoring and emissions-control technology is growing faster than almost any comparable manufacturing category. 

The energy transition is generating demand for monitoring, measurement, and efficiency hardware across Southeast Asia, the Middle East, Sub-Saharan Africa, and Latin America. 

These are markets where India has geographic proximity, established trade relationships, and demonstrated engineering capability. Yet India's share of this global market remains marginal.

$30.43 billion

That is how much India's merchandise trade deficit widened in June, as exports fell faster than imports amid shipping disruptions in the Strait of Hormuz linked to the West Asia conflict. This compares with a $28.21 billion deficit in May.

Catch Up Quick: Government data released Monday showed merchandise exports dropped to $40.41 billion from $45.2 billion in May, while imports eased to $70.84 billion from $73.41 billion. Despite June's slump, India's overall goods exports rose about 15% year-on-year in April-June, aided by pricier petroleum shipments.

Setting: The widening gap adds pressure on India as it negotiates an interim trade deal with the US, which the Commerce and Industry Minister Piyush Goyal said is "balanced, commercially meaningful" and beneficial for businesses, farmers, workers and consumers in both countries.

Services exports were estimated at $33.03 billion in June, yielding a services trade surplus of $15.11 billion.

India Tightens Renewable Grid Rules

India has told renewable energy companies to give up their power transmission rights or pay bigger bank guarantees if they are not actually generating power. The move aims to free up grid space for projects that are really producing electricity.

Overview: An order from the Central Electricity Regulatory Commission (CERC) said a lot of renewable energy capacity given out between 2019 and 2025 still has no buyers. This means valuable transmission space is being used up by projects that may never get built. CERC believes around 15.7 GW of this unused capacity could be freed up for other developers.

Companies can also pass on their transmission rights to a related company that is generating power but doesn't have a grid connection, or keep their rights by paying extra bank guarantees while building the project on their own.

Setting: Any transmission rights given up will first go to other applicants at the same substation, and whatever is left over will be auctioned off.

Inflation Heats Up

India's retail inflation rose to 4.38% in June, up from 3.93% in May, crossing the Reserve Bank of India's 4% target for the first time in 17 months. The increase came as food inflation climbed to 5.32% from 4.78%, while higher fuel prices and other non-food costs pushed up the overall index. 

Pivot: Rural inflation remained higher than urban inflation, reflecting stronger food price pressures. Prices rose across categories including food, transport and restaurants, although some items such as potatoes continued to see deflation.

The Shift: Dipti Deshpande, senior director and principal economist at Crisil Ltd, said higher domestic fuel prices are likely to broaden inflationary pressures as businesses pass on rising input and transportation costs to consumers.

She added that uneven rainfall, a below-normal monsoon forecast and emerging El Niño conditions could keep food prices elevated in the coming months, although ample buffer stocks and timely government intervention should help contain sharp spikes. Crisil expects CPI inflation to average 5.1% this fiscal.

Meta On Trial

The Centre is reviewing Meta's response after reports revealed that Instagram carried paid advertisements linked to child sexual abuse material, IT Secretary S Krishnan told Press Trust of India. The Ministry of Electronics and IT had previously issued a notice seeking an explanation of how such ads passed through the platform's moderation systems and what steps Meta had taken to prevent similar incidents.

What’s Next?: Krishnan said the government is examining the company's reply and will decide on the next course of action after completing its assessment. The review follows a BBC investigation that alleged Instagram approved and displayed paid ads linked to child sexual abuse material. 

Setup: Meta said it has a zero-tolerance policy towards child sexual exploitation, removed the identified advertisements, and continues to strengthen its detection and enforcement systems.

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The Markets Hold Their Ground

On Episode 926 of The Core Report, financial journalist Govindraj Ethiraj talks to Varun Lohchab, Chief Research Officer–Equities at HDFC Securities as well as Aditi Nayar, Chief Economist at ICRA.

• The Markets Hold Their Ground Despite Renewed Fighting In West Asia

• Asian Paints Raises Prices By A Surprising 12% In Sign Of Tail Order Impact

• The SpaceX Stock Debacle, The Story Behind The Story

• Retail Inflation Hits 4.8% As Impact Of Fuel Price Hikes, Food Kicks In

• Earnings Season Has Kicked Off, What Lies In Store?

• India's Exports Rose By 15.5 Per Cent To $40.41 Billion In June