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States Urged: Boost Revenue via Premiumisation, Not Hikes
7 Oct
Summary
- Alcohol taxes in India range from 65-70%, reaching up to 80% in some states.
- The industry advocates for premiumisation to increase state revenues effectively.
- Premium alcohol pricing controls can delay revisions for two to three years.
India's alcoholic beverages industry is calling for tax rationalization, as taxes often account for 65-70% of the price of a ₹100 alcohol bottle, soaring to 80% in some regions. ISWAI CEO Sanjit Padhi emphasized that high taxes limit industry margins and urged states to focus on generating higher revenues through premiumisation rather than repeated tax increases.
Padhi advocated for greater pricing freedom for premium alcohol products, noting that current control mechanisms can delay price revisions for two to three years, impacting investment and innovation. He questioned the necessity of price controls on premium items, suggesting consumers who can afford them should have more choice. The market value has significantly grown, reaching an estimated ₹6.2 lakh crore in 2025 from ₹3.9 lakh crore in 2021, with premiumisation being a key driver.
The AlcoBev sector contributes substantially to the Indian economy, generating around ₹4 lakh crore in taxes annually. The industry supports millions of jobs across agriculture, food and beverage, and retail sectors. ISWAI's objective is to drive value through premiumisation and better revenue utilization, promoting a "drink better, not more" approach.
