The International Spirits & Wines Association of India (ISWAI), representing multinational and domestic alcoholic beverage companies investing and operating in India, has urged immediate action on the pressing matter of steep state excise duties. These duties constitute approximately 70-80 percent of the consumer Maximum Retail Price (MRP), exacerbating inflationary pressures and placing considerable strain on the industry.
With rising inflation rates across the country, the alcoholic beverage sector is grappling with significant challenges due to the escalating costs of production, transportation, raw materials, and exorbitant import duties. This situation poses a dire threat to the industry’s sustainability.
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Nita Kapoor, CEO, ISWAI while emphasising the need for urgent action said, “The liquor industry has consistently and significantly contributed by generating 25-40 percent of revenues for state governments and nearly 2 percent of nominal GDP. However, the current tax and tariff structure, characterised by high excise duties, limited supplier price flexibility, and exorbitant import duties of 150 percent (50 percent BCD + 100 percent AIDC), is pushing the industry toward a crisis. Regulators must recognise the necessity of inflation-linked adjustments in supplier prices as the Alco-Bev industry is a cornerstone of economic activity.”
ISWAI’s specific recommendations include implementing a uniform inflation-linked supplier pricing model for the industry, rationalizing ad hoc levies and taxes imposed by state governments, and utilizing technology for operational ease and approvals.
ISWAI believes that by implementing these steps, economic growth will be stimulated and new employment opportunities will be created. This will also provide consumers with access to a wider variety of affordable and premium choices, and position India as a leading player in the global spirits market, as stated in an association release.
ISWAI called for a collaborative outlook between industry stakeholders and policymakers to ensure the continued prosperity of the Alco-Bev sector and its contribution to the Indian economy, it added.
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