Biodiesel has the potential to serve as a feasible substitute for fossil fuels in many sectors, including transportation and internal combustion engines, without requiring extensive modifications. UsinHemg alternative energy sources, including biodiesel, is necessary to effectively tackle the growing demand predominantly observed in the transportation sector. This review is aimed to examine the technological progress, potential benefits, obstacles, and prospects associated with using biodiesel in India. India exhibits a significant potential for biodiesel production due to the abundance of various biofuel crops within its territory. The information supplied includes recent information from official government reports and literature. Collaborative efforts among all stakeholders in the energy industry can achieve the realization of reducing imports of petroleum‐based fuel. However, it is essential to consider several significant elements specific to the Indian context when considering the utilization of biodiesel. The reported findings in this research are expected to shed light on the current and prospects of biodiesel deployment in India.