Life cycle assessment (LCA) approach is used in the study. The life cycle impact assessment (LCIA) was done in 'GaBi 6.3 Software' using the CML 2015 method. Life cycle plan were prepared for different blends of biodiesel (B5: 5% biodiesel, B10: 10% biodiesel, B15: 15% biodiesel, and B100: 100% biodiesel) and fossil fuel diesel. In process of biodiesel production, glycerine is also produced which is a valuable by-product. ISO standard says allocation is required when two or more valuable product results from the single process. As the amount of glycerine produced is very less comparing to the biodiesel produced but its economic value (~60 INR/L) is much higher than the biodiesel (~37.64 INR/L) ; allocation has been done on the price basis for the glycerine and biodiesel. To identify the most sensitive parameters in the life cycle of biodiesel sensitivity analysis is done for B100 blend of biodiesel, total 23 parameters were identified, and value of each parameter was changed by ±10% and % change in the life cycle impact was observed. Several scenarios are analysed in the study for three identified highly sensitive parameters: seed yield, life cycle span of Jatropha cultivation, and emission intensity of Indian power grid.