ISWAI applauds progressive state excise reforms

The International Spirits and Wines Association of India (ISWAI) has lauded state governments for implementing progressive excise policies that are transforming the alcohol retail landscape, increasing revenue, and improving consumer experience, stated media reports.

From Uttar Pradesh’s composite retail formats to Andhra Pradesh’s privatised model, Rajasthan’s premium outlets in malls, Madhya Pradesh’s single-bottle billing initiative, and the premium-only retail formats in Haryana, Telangana, Karnataka, and Odisha, these policies are ushering in a new era for India’s alcohol retail ecosystem.

Welcoming these developments, Sanjit Padhi, CEO of ISWAI, said, “The reforms we are witnessing across different states in India, signal a paradigm shift in how the alcobev sector is perceived and managed, and reflects the state governments positive intent and commitment. Progressive excise policies are not only improving compliance and transparency, but also creating the foundation for sustainable, consumer-centric growth.”

Uttar Pradesh is leading this transformation with a reform-oriented excise policy for FY 2025-26. With an ambitious revenue target of ₹55,000 crore, a 10 percent rise from the previous year, the state has consolidated over 12,000 retail outlets into approximately 9,000 composite vends, enhancing accessibility and market reach. The introduction of a digital e-lottery system for retail licensing has already generated more than ₹2,250 crore, with licence fees projected to contribute over ₹4,200 crore, demonstrating the direct impact of digitisation and transparency on state revenues.

“Uttar Pradesh has been a leader in driving structural reforms that have seen its revenue jump from ₹24,000 crore in FY 18-19 to a target of ₹55,000 crore in FY 25-26, growing at a rate of 13 percent CAGR,” said Sanjit. “ISWAI members are the largest contributors to the state’s IMFL revenue (over 55 percent), and we believe that the current changes are part of building a sustainable, growth-oriented revenue model that is also consumer-centric. The new outlets and investments in the retail infrastructure will result in a superior consumer experience.”

The policy also offers increased operational stability for retailers by issuing two-year licences via the digital lottery, limiting individual ownership to two outlets to encourage fair competition and foster a level playing field.

A focus on premiumisation is also reshaping retail standards in Uttar Pradesh. New composite vends are being upgraded to modern, well-lit, and secure outlets, making them more appealing, particularly to women, and promoting responsible consumption.

Sanjit added, “We’re witnessing the rise of a more inclusive, modern alcobev ecosystem. From premium retail formats to safer consumer environments, these changes are aligning with global best practices and unlocking new growth opportunities. This will also provide consumers with high-quality premium brands and genuine products, deterring counterfeit products and encouraging responsible drinking. We hope that other states adopt the best practices of these progressive states.”

Other states are following suit. Andhra Pradesh’s privatised retail model now supports 3,736 liquor vends, resulting in a ₹1,800 crore revenue increase and a 37 percent surge in scotch whisky sales. Rajasthan has introduced a four-year excise policy, providing much-needed stability for businesses and investors.

“The industry needs business stability as it allows room for building long-term investment plans. Rajasthan has taken this step, which we hope will inspire many other progressive states to evaluate and build this into their future planning process,” the ISWAI CEO stated.

Rajasthan has already witnessed a 55 percent rise in IMFL sales since FY 2021, driven by its premium outlets at airports and shopping centres. Both Madhya Pradesh and Rajasthan have seen substantial volume growth of 27 percent and 55 percent, respectively, due to composite retail formats that ensure equitable access and reduce the prevalence of illicit trade.

Madhya Pradesh’s 2025-26 policy includes stock carry-forward and single-bottle billing for premium brands, furthering traceability and operational efficiency. Meanwhile, Uttarakhand is rolling out Smart Liquor Stores in shopping malls, and states like Haryana, Telangana, Karnataka, and Odisha are focusing on premium-only retail formats to address rising urban demand.

However, pricing control remains a significant challenge. Sanjit urged for deregulation in the IMFL sector, stating, “Market forces should determine pricing, and no company will risk its business by arbitrarily pricing itself out of the market.” ISWAI strongly recommends the removal of pricing controls to liberate and unshackle the industry, encouraging greater investment and more robust contributions to state revenues.

Several leading states, including Madhya Pradesh, West Bengal, and Uttar Pradesh, have digitised operations to enhance ease of doing business, a step other states could emulate to improve efficiency and resource management.

With more states poised to adopt similar reforms, India’s alcobev sector is evolving into a modern, progressive ecosystem that balances public interest, economic growth, and consumer satisfaction, marking a pivotal moment in the industry’s development.