Government of India through its DGFT has imposed restrictions on the import of biofuels including ethyl alcohol and other denatured spirits, bio-diesel, petroleum oils through an amendment. The free import of biofuels has been restricted and it is allowed only for non-fuel purposes. The move has been made to cut oil imports by Rs.4,000 crore in 2018. It will also provide a boost, when it is planning to develop bio refineries with an investment of ₹ 100,000 million. The move is expected to save ₹ 120,000 million in import bills by the year 2022.
The move is also done to restrict the arbitrage opportunity in import of diesel which is charged around 50% while for biofuels it is 10%. Many smarts saw this an opportunity to bring 30% blended bio fuels with diesel which results in loss of revenue to exchequer.