<p>India is one of the fastest growing markets for alcoholic beverages. Various factors including a sizeable middle-class population with increased purchasing power, rapid urbanisation, changing consumer preferences, and reduction in cultural barriers to drinking, have contributed towards growth in demand for alcoholic beverages. Revenues from taxation of sales in this sector are among the top-three revenue earning sectors for the state governments and the sector generates significant direct and indirect employment.<br /> The states through their excise policies, control the entire supply chain of alcoholic beverages from manufacturing and distribution to registration and licensing processes, labelling and packaging requirements, and retail.Price control is one of the core components through which the states regulate this sector. However, the pricing policies and governance models vary across states, creating different route-to-market channels. There are frequent and ad-hoc changes in policies, creating uncertainty and deterring manufacturers/distillers to plan their businesses in advance. The variations in regulations and operating models across states have added to the compliance burden of participants across the supply chain, leading to low ease of doing business. It has resulted in India becoming a fragmented market, undermining the concept of India as a single market. Further, unlike other countries such as Chile, India has not been able to leverage its export potential in this sector, in spite of having potential.&nbsp;<br /> Given this background, this report, based on secondary information analysis and a primary survey provides an overview of the Indian alcoholic beverages market, highlighting market trends and contributions to the economy, the supply chain and the various routes-to-market followed across states. The report outlines the regulatory framework governing the sector, both at the centre and across states; and presents the changes effected in the regulations, sales channels and duties, among others, with the onset of the COVID-19 pandemic.The report is a first of its kind, which specifically examines regulatory and pricing related barriers and their impact on the industry, its supply chain, quality of products available to consumers and consequent effects on health, states, and the Indian economy as a whole.</p> <p>&nbsp;<br /> The aim of the report is to help the state governments to develop regulations based on certain principles which makes the regulations predictable and transparent. The report suggests the way forward on how the state governments can learn from global best practices in creating uniformity in developing their pricing models, building transparency and creating more predictable policy environment through data driven and evidence-based policymaking. If the recommendations of this paper are implemented, it can help the state governments in meeting the objectives of earning higher revenue, addressing consumer health concerns, and creating employment. The recommendations can help India in bringing in more investments in to the sector, encourage innovation, improve ease of doing business, enable “Make in India”, enhance exports and the country can be a key player in global value chains of alcoholic beverages.</p> <p>&nbsp;</p>

<p><strong>Dr. Arpita Mukherjee</strong> is a Professor at ICRIER. She has over 25 years of experience in policy-oriented research, working closely with the government in India and policymakers in the European Commission and its member states, United States (US), Association of Southeast Asian Nations (ASEAN) and in East Asian countries. She has conducted studies for international organisations, Indian industry associations, non-government organisations and companies.&nbsp;<br /> Her areas of expertise include trade and investment; trade agreements; services; special economic zones; economic corridors; retail and food supply chain; start-ups, entrepreneurs; e-commerce and cross-border labour mobility.&nbsp; She specialises in sector and product-specific market trends, go-to market strategy, and government policies.<br /> Dr Mukherjee has a PhD in Economics from the University of Portsmouth, UK, and prior to joining ICRIER, she worked with the UK-based think tank - Policy Studies Institute and taught at the University of Portsmouth. She has over 80 publications including national and international referred journals, books and book chapters and government reports. Dr. Mukherjee is a member of various government committees and policy panels and is in the editorial board of 10 journals. She has presented her work in various conferences and seminar and is in the advisory board of academic organisations, industry associations and non-government organisations. She is a regular contributor to newspapers and magazines.</p> <p><strong>Mr. Aditya Prakash Rao</strong> is a Partner at PLR Chambers, who prior to joining PLR Chambers worked with Amarchand &amp; Mangaldas and Suresh A. Shroff &amp; Co., New Delhi, and was a Principal Associate (Designate) at the Public Policy and Regulatory Affairs practice group.<br /> As a policy and regulatory affairs specialist attorney, Mr. Rao has experience in advising and representing clients (public/private) through tailored policy briefs, crisis management response, legislative drafting and the like. Aditya has drafted notes for cabinet, executive orders, legislations and working documents for various ministries/government bodies. He has co-authored the white paper titled ‘Fuel Blending in India: Learnings and Way Forward’ demonstrating significant advantages that can be offered by blending fuel with alternative forms of biofuel.<br /> He has been involved in advising/representing both MNC’s as well as Law Enforcement Agencies across India on digital evidence collection and prosecution. Mr. Rao also advises not-for-profit organisations on organizational entity identification, incorporation/registration, structuring of functions, Indian and foreign funding, and regulatory interface facilitation, including on a pro bono basis.</p> <p><strong>Angana Parashar Sarma</strong> is a PhD candidate at the Birla Institute of Technology and Science (BITS), Pilani, in the area of ‘International Development’. Prior to pursuing her PhD, she was working as a full-time researcher at the Indian Council for Research on International Economic Relations (ICRIER). She has three years of experience in conducting policy-oriented research in the fields of trade and trade facilitation, export competitiveness, SEZs, e-commerce and digital connectivity, start-ups and entrepreneurship. She has conducted studies for international organisations such as the International Labour Organization (ILO) and the Foreign, Commonwealth and Development Office (FCDO), UK; and industry associations such as the Confederation of Indian Industry (CII). Under FCDO, she has worked extensively with Indian government agencies such as the Food Safety and Standards Authority of India (FSSAI) on food safety standards and streamlining imports, and the Department of Economic Affairs, Ministry of Finance, for their G20 negotiations.&nbsp;<br /> She has over 10 publications to her credit in the form of book chapters, reports, and referred journal articles. She has a Masters in Economics from Jamia Millia Islamia, Delhi and a B.A. (Hons.) degree in Economics from Sri Ram College of Commerce, University of Delhi.</p> <p><strong>Nibha Bharti</strong> is a Research Assistant at the Indian Council for Research on International Economic Relations (ICRIER). She has over 2 years of experience in policy-oriented research. At ICRIER, she is a key member of the research team working on G20 issues for the Department of Economic Affairs, Ministry of Finance. She is working in processed food and beverages sector, to analyse sales and purchase trends over the past decade and to forecast. She is also working on emerging market opportunities in the domestic and export markets, trade and services data analysis, countries service barriers and among others. She is also contributing to diverse projects related to India-EU, India-UK trade relations. Prior to joining ICRIER, she has worked on data analytics tools used for predicting cooking fuel demand in NITI Aayog, New Delhi. Subsequently, she has experience in retail sector and consumer sentiment analysis. She completed her MSc. in International Business Economics and Finance from Gokhale Institute of Politics and Economics, Pune and Bachelors in Economics (Hons.) from St. Xavier’s College, Ranchi.<br /> She has over 5 publications in the form of reports, working papers and articles.</p> <p><strong>Preksha Dugar</strong> is a Senior Associate at PLR Chambers. She graduated with a degree in B.A. L.L.B. (Hons.), from Hidayatullah National Law University, Raipur in 2015. At PLR Chambers, Preksha is a part of the legislative drafting and policy formulation team and assists in government relations assignments. Notably, she has been part of the team at PLR Chambers, which has drafted amendments to the Central Motor Vehicle Rules, 1989, in line with the Motor Vehicles (Amendment) Act, 2019 and is currently drafting the revamped Merchant Shipping Bill, 2020. She also advises the government and private sector on policy and regulatory issues relating to motor vehicles, biofuels usage along with legal issues relating to general corporate law.<br /> Previously, she was part of the Infrastructure and Energy Law team at Clarus Law Associates, where she advised public and private companies on transactions pertaining to urban development and infrastructure building. She also assisted clients in concluding transactions on project finance. Her working career at Clarus Law Associates also included making representations before courts, tribunals and arbitration proceedings.</p>