India has the world’s third-largest and fastest-growing market for
alcoholic beverages. Its whiskey market is estimated to be 300 million
cases, which makes it the largest in the world. Nevertheless, doing
business in India remains difficult for both domestic and foreign
alcohol producers. India would benefit tremendously from opening up its
liquor market.
A recent study by India-based CPPR states that restrictive liquor policies in India have harmed
both consumers and businesses, as well as fueling black-market
activities. The study reports that the average customs duties on
Imported Foreign Liquor (IFL) is 150 percent, and state taxes push the
total liquor tax burden to around 550 percent. As a result, liquor
prices in India are significantly higher than in 95 percent of the
countries in the world, and two to four times more expensive than the
global average price.
It is estimated that the combined tax earnings of the states and
union territories (excise) from alcohol beverages in 2011 fiscal year is
around $4.67 billion USD, accounting for about 16 percent of their
total revenue.
