India, Aug. 3 -- For decades, Maharashtra's political and economic story could be told through its sugar factories. They shaped cooperative politics, transformed villages across western and southern Maharashtra, created employment and determined the fortunes of the state's rural economy. Every crushing season was a barometer of prosperity, with sugar prices influencing everything from farmers' incomes to local politics.

Today, those very factories are quietly undergoing another transformation. Many are no longer just producing sugar. Increasingly, they are producing ethanol.

The shift has been so gradual that it has escaped the public attention it deserves. Conversations around ethanol often remain confined to debates over petrol blends...