Untangling the Threads of India’s Alcobev Industry

Madhu Mandapam’s ThinkPad brought together senior government officials and leaders from the alcoholic beverage sector under one roof to map a path from short-term revenue maximisation to a predictable, growth-oriented industrial policy. Titled ‘Building a Sustainable Excise Model While Maximising Revenue and Strengthening CSR Commitments,’ the panel moderated by Rajnish Singh, Founder of Dhvaen Law Practice, featured Sandip Kote, Director, Ministry of Food Processing Industries; Dr Tarun Bajaj, General Manager, APEDA; Maj Gen (Retd) Rajesh Chopra, Director General, Indian Malt Whisky Association; Ashutosh Rajput, Chief Operating Officer, Alcobrew Distilleries India Ltd. as well as Raju Vaziraney, Business Development Head & Adviser, Amrut Distilleries and Advising President-IMFL, IGL. Together, they explored how coherent policy, export promotion and industry standards can together transform the sector.

In the past few years, a rare alignment has emerged between state revenue interests and long-term alcobev industrial development. Ministries and agencies that once confined themselves to narrow, short-term fiscal measures are now convening task forces, simplifying export rules and taking industry leaders and excise commissioners on exposure visits abroad, all with an aim of untangling decades of fragmented rules and building a predictable, growth-friendly environment. “We want industry to grow in a rule-based way,” said Kote, while emphasising harmonisation, ease of doing business and representation of the sector in Free Trade Agreement (FTA) negotiations.

A central plank of this effort has been MoFPI, which while recognising excise and taxation as state subjects, is asserting a coordinating role for the alcoholic beverage segment. “We formed a task force to develop model export labels, which have been approved and will be released shortly. The same task force is also tasked with coordinating the model excise policy with all the state governments,” informed Kote. The objective is to create a level playing field between domestic producers and imports, remove needless regulatory clutter and give producers the legal certainty they need to invest and innovate.

Complementing MoFPI’s work, the Agricultural and Processed Food Products Export Development Authority (APEDA) has set ambitious export targets of USD 1 billion for alcohol products and is working closely with producers and state authorities to tackle technical and procedural barriers. APEDA’s consultations have shown that India now makes worldclass single malts, gins and rums that can compete abroad, but exporters are often hampered by overstated labelling requirements, inconsistent state excise regimes and international disputes about product definitions. Simplified labelling for exports and more consistent excise concessions are being piloted as practical remedies.

Regulatory Challenges

Premium brands contribute disproportionately to export value and international reputation, yet they operate at low volumes and face high fixed costs for licensing, registration and market entry. Panellists were unanimous that unpredictability in state excise policies is a major barrier to investment. “The excise policies are generally for one year. Where is the reason for us to have a one-year policy?” asked Vaziraney.

Short tenures create deep uncertainty for investors, particularly those with long lead times such as maturation for single malts. Longer policy cycles, he argued, would reduce compliance costs and give nascent premium brands the breathing room they need to reach scale. He praised progressive state experiments like Rajasthan’s four-year policy and Uttar Pradesh’s two-year policy with administrative renewal provisions, but said more consistency is required nationwide.

Industry leaders also identified tax, inter-state disparities, arbitrary price controls and opaque label approvals as drivers of inefficiency, malpractices and revenue loss. “The same product, you buy it in one state for say ₹1,000, would cost you ₹2,000 in some another state. This leads to malpractices which further leads to loss to the exchequer,” stated Rajput. While taxation remains a state subject, he argued that uniform principles are needed to prevent arbitrage and malpractice.

Label approvals and exportoriented packaging requirements also featured prominently in the panel discussion. APEDA found that label clutter and multilingual requirements create unnecessary friction with importers and regulators overseas.

Practical policy instruments suggested by panellists included graded licence fees, entry-level concessions for nascent premium brands, a single simplified export label regime, greater recognition of Indian maturation practices and stronger promotional support to build domestic and international demand.

Tailored Support

Trade policy is now part of the conversation. MoFPI and APEDA are representing the sector in FTA negotiations, including complex talks with partners such as the European Union, to ensure market access is balanced with protection for nascent domestic industries.

On the export front, APEDA has already started generating quick gains through targeted diplomacy. “We took a few excise commissioners with us abroad. When one of the excise commissioners returned, the first thing he did was introduce a special exportrelated excise policy,” informed Bajaj.

Industry bodies are stepping up too. Maj Gen (Retd) Rajesh Chopra described IMWA’s aim to “protect from misrepresentation, fly-by-night operators, preserve the unique identity, authenticity and craftsmanship of our manufacturers and promote premium world-class single malts under a single unified banner.” IMWA is pushing for an expanded, modern definition of single malt that recognises maturation practices in a tropical climate, a technical but commercially vital distinction with implications for domestic branding and international recognition.

Industry leaders, meanwhile, emphasised India’s climatic edge for faster maturation driven by a higher Angel’s Share that can be advantageous for craft and premium spirits, though it also accelerates fixedcost recovery pressures for brands at market entry.

Building an Ecosystem

Towards the end, the discussion moved beyond excise and exports to focus on retail experience, corporate social responsibility (CSR) and social licence. As Vaziraney observed, “Liquor is a lifestyle business.” It benefits from experiential retail, knowledgeable front-line sellers and on-trade venues that educate consumers. However boutique, experiential retailing that can showcase premium Indian brands still remains patchy. Several panellists called for incentives to professionalise the front trade and to encourage retail innovation, including measures that support Canteen Stores Department (CSD) purchases.

Additionally, they pushed for sustained CSR programmes tied to community development and environmental stewardship, emphasising that such measures complement fiscal reforms by making the sector socially sustainable as it grows.

The alcobev sector contributes vast sums to state coffers while supporting agriculture, logistics, tourism, retail and finance. That dual character makes predictability and sound regulation essential. The sector is not merely a fiscal lever but an industrial cluster with export potential and employment linkages. The

Madhu Mandapam ThinkPad demonstrated that consensus between government bodies and industry is growing. Practical steps are already underway. Though these are modest, but are meaningful shifts towards predictability and export competitiveness. As Dr. Bajaj remarked, “Dhaage uljhey huey hain, unhein suljhane ka kaam abhi shuru hua hai.” (The threads are tangled; the work of untangling them has only just begun.) That admission underlined the complexity of aligning central guidance with dozens of state excise regimes, but it also signalled the seriousness of the attempt.