Uttar Pradesh booze rush: How state's liquor trade hit Rs 51,000 crore mark

Liquor shop

A radical overhaul of Uttar Pradesh’s excise policy has triggered an unprecedented surge in revenue, with the state’s liquor sales touching a staggering Rs 51,000 crore in 2024-25 - more than double the pre-pandemic figures of Rs 23,927 crore in 2018-19, according to data from the state excise department.

For the first time in seven years, Uttar Pradesh reintroduced an online lottery system to allocate liquor licences, leading to massive participation. A total of 418,111 applications were submitted for just 27,308 shops, meaning each outlet had an average of 15 bidders competing for ownership, as reported by TOI.
The excise department earned Rs 2,000 crore from application fees alone, with charges ranging from Rs 25,000 for a bhaang (cannabis) shop, Rs 40,000 for a country liquor shop to Rs 60,000 for upscale "model" shops that offer seating for customers, as per TOI.

A key change in the policy was the introduction of composite liquor shops, allowing retailers to sell both beer and Indian-made foreign liquor (IMFL) under one licence. This model, already successful in Madhya Pradesh and Rajasthan, replaced standalone beer and IMFL outlets.
Excise Commissioner Adarsh Singh stated that the move broadened the customer base, with some composite shops in high-demand areas like Greater Noida attracting as many as 265 applicants.

With Bihar enforcing prohibition since 2016, border districts in Uttar Pradesh, such as Kushinagar, Deoria and Ballia, have seen a sharp rise in demand. Retailers in these areas report that sales have tripled, with many customers from Bihar crossing state lines to purchase alcohol.

The policy shift has also encouraged new entrants into the market, with an estimated 40 per cent of licence winners being first-time applicants, according to UP Excise Minister Nitin Agarwal, quoted TOI. Industry experts, including Manish Agarwal of the All-India Distillers’ Association, predict further expansion as more brands enter the market to meet growing demand.