NEW DELHI: Indian spirit makers have alleged bias in state excise policies, claiming they favour imported alcoholic beverages over domestic brands, including those with global recognition.
The Confederation of Indian Alcoholic Beverage Companies (CIABC), the apex body of Indian spirit manufacturers, has flagged these concerns to several state governments, pointing out that policy anomalies are putting homegrown brands at a disadvantage compared to imported “bottled in origin” (BIO) products.
According to CIABC, Indian brands are burdened with “exorbitantly high brand registration fees” compared to BIO imports, which discourages new product entry in many states. With upcoming free trade agreements set to reduce customs duty on imported spirits, high state-level excise duties on Indian premium brands could make them even “less competitive.”
“It is ironic that when Indian premium and luxury brands are winning accolades globally, they face hurdles in their own domestic market due to discriminatory taxation. This goes against Prime Minister Narendra Modi’s call for an ‘Atmanirbhar Bharat,’” said CIABC.
BIO products refer to whiskies and spirits bottled in their country of origin and imported into India with branding and packaging intact.
The association said such policy discrimination exists in about a dozen states, including major liquor markets like Maharashtra, Delhi, Kerala, Haryana, Odisha, Assam, and Madhya Pradesh.
Maharashtra case study:
In Maharashtra, the excise duty on India Made Foreign Liquor (IMFL) is double that on BIO products. Until 2021, the state levied 300% duty on BIO, but this was cut in half while IMFL continues to face the 300% rate. As a result, BIO sales surged from 5,000 cases per month in 2021 to 42,000 cases per month in 2024, hurting domestic IMFL sales and state revenue.
For instance, a case (12 bottles of 750ml) of Amrut Fusion, a premium Indian single malt, pays Rs 6,799 in duty, whereas JW Black Label, a blended Scotch, is charged Rs 4,785 per case. Growth in premium IMFL sales has also slowed to 6% in FY24, down from 24% in FY23.
Delhi policies:
CIABC highlighted that imported brands in Delhi pay significantly lower fees and taxes than Indian competitors. An Indian producer must spend Rs 8–25 lakh to register a single brand, while BIO products can register five spirit brands for just Rs 15 lakh (Rs 3 lakh each). A similar disparity exists in wine registration.
For IMFL, the Delhi government charges Rs 25 lakh per brand for whisky and rum, Rs 15 lakh for beer, Rs 12 lakh for rum, gin, vodka, Rs 8 lakh for brandy, and Rs 2 lakh for wine. Such steep costs discourage new Indian entrants, particularly premium single malts, from entering the capital market despite their popularity elsewhere and abroad.
Kerala policies:
In Kerala, CIABC alleged discrimination in excise duty, sales tax, retail margins, cash discounts, and STN (special transfer note) charges. IMFL brands bear a heavy tax load, while BIO products enjoy lower levies, making them cheaper at retail despite similar supply prices.
“BIO brands are being pushed in the market at the cost of Indian premium brands, whose competitiveness is being eroded,” CIABC Director General Anant S. Iyer said.
