Indian Sugar Mills Association (Isma) President Tarun Sawhney on Friday said India was close to achieving an average five per cent ethanol blending across the country, mainly because of a fixed-price mechanism.

He highlighted the need for cars and other vehicles that could run on 100 per cent ethanol, and also said that there was a need to set up several more sugarcane-based ethanol distilleries to increase the average blending to 10 per cent.

Speaking at a workshop on ethanol in New Delhi, Sawhney said that lead time for ethanol-based distilleries needed to be brought down to encourage investments and aid setting up of more such units.

"There is no chance of a sharp decline in sugarcane output in the next few years," he said.

Calling for banks to include ethanol in priority-sector lending, Sawhney said India needed 2.66 billion litres of ethanol to achieve 10 per cent blending, while total capacity of sugar industry was about two billion litres.