The Madhya Pradesh government has rolled out a fresh excise policy for the 2025-26 financial year, bringing some significant changes to liquor regulations in the state. Starting April 1, 2025, all liquor outlets in designated religious regions will be shut down.
A major highlight of the policy is the introduction of “Low Alcoholic Beverage Bars,” a first-of-its-kind move in the state. These bars will serve only beer, wine, and pre-mixed alcoholic drinks with an alcohol content capped at 10% v/v, while hard liquor like whiskey, rum, and vodka will not be allowed.
As part of the policy, liquor sales will be prohibited in 19 locations, including 17 religious towns. This will lead to the closure of 47 alcohol outlets in areas such as Ujjain, Omkareshwar, Maheshwar, Orchha, Maihar, Chitrakoot, Datia, Amarkantak, and Salkanpur. These shops, which sold both Indian Made Foreign Liquor (IMFL) and country liquor, will cease operations. However, individuals will still be permitted to bring and consume liquor from outside, as the state has not imposed a complete prohibition.
At present, Madhya Pradesh has around 460-470 establishments that sell both liquor and beer. With the addition of Low Alcoholic Beverage Bars, the total number of outlets is expected to rise significantly.
The decision to close liquor shops in religious areas is expected to result in a revenue shortfall of approximately ₹450 crore, but the government believes the policy will encourage more controlled alcohol consumption.
The new excise rules also include a 20% hike in liquor shop renewal fees for 2025-26. Meanwhile, the state’s Heritage Liquor and Wine Production Policy remains unchanged, meaning heritage liquor manufacturers will continue to enjoy VAT exemptions.
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Madhya Pradesh is also doubling down on its Grape Processing Policy to support fruit-based alcohol production. This initiative will expand wine-making beyond just grapes and jamun to include other fruits and even honey sourced locally.
Additionally, the policy grants wine producers permission to operate retail stores at their production sites. Tourists will be able to visit wine-tasting facilities at these wineries, adding a new dimension to the state’s liquor industry.
From the next financial year, foreign liquor bottling units will be authorized to manufacture, store, import, export, and sell specialty liquors. Meanwhile, the state’s 3,600 liquor outlets are projected to generate approximately ₹15,200 crore in revenue this fiscal year.
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