"Prime Minister has directed Finance Minister and me to prepare a policy to promote clean fuel," Gadkari told reporters on the sidelines of a TERI event on clean fuel.
Gadkari said he had written to Jaitley seeking tax holiday for manufacturers of clean fuel engines besides for the suppliers.
"I have written to FM for tax exemption to manufacturers and suppliers for five years which can be extended to another five years," he said.
Gadkari said promoting clean fuel like ethanol has been high on his agenda as it will help in cutting India's huge Rs 9 lakh crore annual import bills on petrol, gas and crude.