Liberalising liquor trade in India

GN Bureau | September 7, 2015




Tariff and taxes on liquor are extremely high in India. Liquor prices are higher than 95 percent of the countries in the world. At the same time, consumption of imported and domestic liquor has been on the rise over the past five years. An average Indian liquor consumer pays five to six times the manufacturing cost of the drink.

Furthermore, farmers and small businesses also suffer from heavy taxes and strong government intervention with the market.

The policy paper prepared by CPPR with support of Atlas Network offers an analysis on India’s liquor policies and their effect on people.

According to CPPR, a feasible start for reforms could be lifting controls and removing tariffs on imported foreign liquor (IFL), which is growing as a preferred brand in India. Despite the high cost to import IFL, sales have grown by approximately 27 per cent since 2009. Steps should be taken towards reducing duties and harmonizing regulations among federal states. The CPPR proposes that the government phase out import tariffs on IFL and build a common policy platform on which liquor trade facilitated.

Read full report here

It also suggests that an open market for both foreign and domestic liquors will also enhance the economic environment and improve public health.

Currently very few domestically produced liquor have a website which informs the consumers of the ingredients, origin and related health benefits/hazards of the types of liquor they are consumin, says the CPPR report.

 

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