Speaking at a bio-diesel conference here the minister said that in view of the amount of bio-diesel exports at present "we need to make necessary amendments in the government policy to change the situation".
While around 80 per cent of the production is exported, the balance is consumed by domestic industrial users.
The minister said he will discuss the matter with the ministries of power, railways and petroleum and natural gas.
While global biodiesel consumption was 22 million tonnes in 2013, the domestic consumption has been at 0.11 MT from 2009-2014.
During 2009-2014, export of biodiesel contributed a forex earning of around Rs. 800 crore.
Gadkari had said earlier that necessary changes were being made in laws to bring them at par with international standards to enable cars, especially those running on bio-fuels, to ply on Indian roads.
Biodiesel Association of India president Sandeep Chaturvedi said: "While drugs, cosmetics can be sold directly to consumers, there is restriction on selling clean fuel to bulk consumers.
"Allowing direct sale of biodiesel to bulk users can help save up to Rs. 420 crore of forex spent on buying crude."
Currently, the biodiesel industry in India has an installed capacity of 1.2 million tonne. However, merely 7 per cent of the capacity is utilised due to restricted sale of the fuel, the Biodiesel Association said.