It's not that there aren't enough ethanol plants, it's just that there isn't enough incentive to built one. Ethanol demand in India is very low and government is lukewarm in pushing flex fuels. EVs on the other hand, are given complete support. They are getting cheaper and cheaper day by day, are much more efficient, etc and the government is actually supporting EV infrastructure by installing charging stations. EV charging stations are also much cheaper to install than ethanol or flex fuel stations. Tata, Mahindra and Suzuki all plan to roll out EV cars and commercial vehicles in the next 2 years, while no company has shown interest towards 100% ethanol vehicles. Modifying existing vehicles would be extremely costly to the population, and the government would never take that risk.
The only way to push ethanol vehicles is to ban petrol/diesel 3 wheelers/commercial-vehicles production and then support manufacturers who are ready to make 100% ethanol/CNG/EV versions of them. But then again that requires infrastructure.