Global warming issue due to the combustion of fossil fuel pushes the world to produce renewable and environmental friendly fuel from sustainable feedstock. There are several measures on different levels to reduce the global warming including clean energies from wind, solar, and biomass. There are different aspects in bringing these technologies into a reality including development of technology, economic feasibilities, environmental sustainability and finally, support from the government in the form of effective policies and public awareness. Adequate R&D efforts could overcome all the factors but only an effective policy could drive those efforts to reality. Therefore, in this connection this review initially addresses the present state of energy demand, progression of biofuel sources and the bottlenecks in microalgal biofuel production and commercialization. The biofuel policies are essential to change the world's dependence on fossil fuels for a better tomorrow. Hence, this review addresses the salient features of National Biofuel Policy of India that helps in regulating the biofuels production and their marketing. As a part of Policy implementation, government of India introduced several schemes and programs in last two-decades, which includes mandate blending of ethanol with gasoline, diesel with biodiesel, for the future clean energy vision, and incentivizing bio-based products/fuels. In addition, participation of both federal and state governments for clean energy initiatives, capital investments and tax credits were described in detail. Many policies lack easy outreach among public and industries, which needs marketing by the government that secures a clean energy future in India. Though India is in the process of evolution, it might be quite difficult to enact a dedicative legislation to deal with the challenges of biofuel marketing. Therefore, recent initiatives and scope were summarized in this review for future endeavours.