Taxes take away nearly 70% of the price of an alcohol bottle in India and in some states the burden rises to 80%. The International Spirits and Wines Association of India has urged state governments to rationalise taxes and allow pricing freedom for premium products. The industry body says premiumisation can raise revenues without repeated tax hikes.
India’s alcoholic beverages market has grown strongly in recent years. It was valued at ₹3.9 lakh crore in 2021 and touched ₹6.2 lakh crore in 2025. The growth came from a 4% compound annual rise in volumes and a steady increase in premiumisation. The share of premium products rose from 29% to 32% in this period.
ISWAI argues that high taxes restrict margins and discourage investment. The sector contributes ₹4 lakh crore in taxes annually which accounts for 6.6% of India’s total tax collections and 19.1% of states’ own tax revenues. The association believes that encouraging premiumisation will help states earn more without burdening consumers.
It also highlights that pricing freedom is vital for innovation and timely price revisions. In some states approvals take two to three years which hurts competitiveness. ISWAI has called for a balanced approach that supports industry growth while ensuring steady revenue for governments.