In India, the leading biofuel feedstock today is sugarcane molasses, which is processed to yield bioethanol that can be blended into gasoline (petrol). Sugarcane requires good land and large amounts of irrigation water, which are difficult for the poor to obtain. The bioethanol industry buys its molasses feedstock from the sugar factories. Sugar is the main objective of the sugarcane industry; molasses are simply a byproduct. As such, the unreliability of supply of molasses is a major constraint to biofuels development based on this feedstock.

Even though India is an agrarian economy, the energy potential of agricultural residues has not been realized till now by policy-makers and masses. Most of the biomass wastes are inefficiently used for domestic purposes in absence of reliable and cheaper source of energy. The main crops produced in India are wheat, maize, rice, sorghum, sugarcane and barley. India is among the market leaders in the production of these crops and has tremendous potential to convert lignocellulosic crop residues into ethanol.