APAC Growth Slows by 2026; India Leads, E20 Fuel Efficiency Noted

Growth across the Asia-Pacific (APAC) region is projected to moderate by 2026, according to a recent report from Moody’s. Concurrently, Road Transport and Highways Minister Nitin Gadkari has highlighted potential fuel economy impacts of E20 petrol.

Asia-Pacific Economic Outlook Softens

Moody’s latest report indicates a projected slowdown in the Asia-Pacific region’s economic expansion over the coming years. The forecast shows a gradual moderation in growth rates.

• APAC growth is projected to decline to 4.1 per cent in 2026.
• This follows a 4.3 per cent growth rate in 2025.
• Further moderation to 3.6 per cent is anticipated by 2027.

This regional deceleration is primarily attributed to several macroeconomic and environmental factors. These include elevated commodity prices, tighter policy settings, and unusually hot and dry weather conditions.

Despite these broader regional trends, Moody’s expects India to maintain its position as one of the fastest-growing major economies within the APAC region. However, India’s outlook is not without its challenges.

• Higher oil prices pose a significant risk.
• Fresh US tariffs could impact trade dynamics.
• Slowing global growth adds to external pressures.
• El Nino is identified as a dual risk, affecting both food and energy vulnerability.

E20 Fuel Efficiency and Performance

Separately, Road Transport and Highways Minister Nitin Gadkari provided insights into the performance characteristics of petrol blended with 20% ethanol, known as E20. He noted a potential reduction in fuel economy.

• E20 fuel may reduce fuel economy by 2%-6%.
• This reduction varies based on the vehicle category and its age.

Despite the potential decrease in fuel economy, Gadkari confirmed that extensive testing has not revealed any durability issues. Engine durability tests on dynamometers and various on-road vehicle trials reported no failures directly attributable to E20 fuel usage.

Furthermore, E20 offers several operational and environmental advantages. A joint study conducted by the Automotive Research Association of India (ARAI) and the Society highlighted these benefits.

• E20 provides better acceleration.
• It contributes to improved ride quality for vehicles.
• It offers approximately 30% lower carbon emissions compared to E10 fuel.

The APAC region faces a period of moderating growth influenced by various factors, while India is projected to sustain its economic momentum. Concurrently, advancements in fuel technology, such as E20, present a mixed bag of efficiency trade-offs and environmental benefits for the automotive sector.