The United States Trade Representative (USTR) has sharply criticized India’s ban on ethanol imports from the US, identifying it as a significant ‘unfair trade practice’ that impedes American exporters. This assertion was a key highlight of the USTR’s 2025 National Trade Estimate Report, released on Tuesday, April 8, which outlines various trade barriers imposed by major global partners that the US believes distorts international commerce and negatively impact its domestic industries and workforce.

The ethanol import restriction is a primary point of contention of trade between Washington and Delhi. In a statement posted on X (formerly Twitter), the USTR underscored that India’s policy not only represents unfair trade but also denies American ethanol producers access to a substantial market. "India bans imports of US ethanol for fuel use. Similarly, Thailand restricts imports of fuel ethanol, securing market access, would result in significant export gains," the USTR stated, emphasizing the need for open markets to ensure equitable access for US goods.

India’s ethanol policy prohibits the import of ethanol for fuel use despite ambitious targets for blending it with gasoline. This has been a subject of disagreement for several years. The USTR argues that this stance undermines the principles of fair trade. The report also highlighted Thailand’s parallel policy, which has restricted fuel ethanol imports since 2005. According to the USTR’s estimates, granting access to the Indian and Thai markets could potentially increase US ethanol exports by at least $414 million annually.

The USTR’s report surfaces amidst already strained US-India trade relations, further complicated by US President Donald Trump’s recent announcement of a blanket 10% tariff on all imports to the US, with a significantly higher 26% tariff specifically targeting Indian goods. This move has sent ripples through global markets and drawn criticism from numerous US allies, adding another layer of complexity to the bilateral trade landscape.

Interestingly, this development coincides with recent diplomatic efforts to improve trade ties. A phone conversation took place on Monday between India’s External Affairs Minister S. Jaishankar and US Secretary of State Marco Rubio, where discussions centered on fostering a ‘fair and balanced’ trade relationship. Following the call, Jaishankar noted on X that both sides "agreed on the importance of the early conclusion of the bilateral trade agreement" and exchanged perspectives on various regional and global developments.

The USTR’s report, however, casts a shadow on these efforts by detailing ten key concerns affecting US trade interests. Besides the ethanol ban, these include China’s dominance in the American flag market, Angola’s impending meat import restrictions, Japan’s tariffs on seafood, the EU’s deforestation-free regulation and Carbon Border Adjustment Mechanism, illegal mining and logging in South America, Algeria’s pharmaceutical trade barriers, Kenya’s high corn tariffs, and Nigeria’s broad import bans.