Biofuels provide only around 2% of total transport fuel today, by 2050, 32 exajoules of biofuels will be used globally, accounting 27% of the world transport fuel. Some biofuels already perform well in economic terms, particularly sugarcane ethanol and other low cost agricultural biofuels. The biofuel program in India at niche stage though the policy has been rolled out well in advance. India has carefully designed the biofuel policy and blending ratio to reduce CO2 emissions and import of the crude oil. The log linear demand function was used to estimate the crude oil, diesel and petrol demand. Based on the demand, the bioethanol and biodiesel requirements were estimated. The possible ways to meet out the biofuel demand and production frontier were elaborated. Proper policy making, domestic production support measures for sustainable biofuel production and infrastructure for anhydrous ethanol storage are the guidepost for successful biofuel program in India.