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Biofuels are being promoted in South Asian region primarily in blended form with petrol and diesel in order to reduce South Asia’s oil import dependence, make the region energy secure, and also as a socially and environmentally benign fuel. However, given the multipronged challenges confronting the conventional biofuels globally as well as in South Asia,the paper makes an attempt to realistically assess the prospects and problems of biofuels promotion in the region.?