UP uncorks new excise policy: Liquor prices to rise, foreign markets in focus

To boost exports, the UP government has cut bottling duty, export pass fee, franchise fee and special fee to minimum levels

• Uttar Pradesh unveils export-focused excise policy for 2026-2029
• Policy aims to double state's share in India's liquor exports
• IMFL prices to rise, wine to get cheaper under new policy

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Uttar Pradesh has unveiled an export oriented excise policy for 2026 to 2029 with a sharp focus on increasing liquor exports and positioning the state as a key contributor to India’s foreign exchange earnings. The policy, the first of its kind by any state, seeks to give Brand UP a foothold in international markets, with a particular eye on opportunities emerging from the proposed India-European Union trade agreement.

Excise Minister Nitin Agarwal told Moneycontrol that Uttar Pradesh currently accounts for around 11 percent of India’s total exports and the state aims to double this share. “For the first time, an export policy has been introduced to establish and promote Uttar Pradesh as a brand. The recent deal between India and the European Union gives us an opportunity to showcase brands from Uttar Pradesh in European countries,” he said. The policy has been announced for three years with the objective of transforming Uttar Pradesh into an export hub for liquor.

The policy encourages companies to manufacture single malt whisky for exports and to set up tasting taverns for foreign visitors. At present, only two companies from the state export single malt products, including Radico Khaitan and Mohan Meakin, with Radico expanding capacity and two of its brands gaining traction overseas. Three more firms have shown interest in entering the segment. Production is set to begin at Modi Distillery in Modinagar, Indo Spirits in Muzaffarnagar and Globus Spirits in Lakhimpur Kheri.

The export policy allows distilleries to manufacture heritage liquor for overseas markets, permits tasting taverns, and enables management of retail sales for export-linked products. It also aims to scale up production of ethanol and other related products using local agricultural grains and fruit-based inputs for industrial use, strengthening farm-linked supply chains.

To boost exports, the government has cut bottling duty, export pass fee, franchise fee and special fee to minimum levels for exports up to 25 percent of the prescribed potable capacity. Brand registration and label approval norms for export-bound liquor have been relaxed and the associated fees reduced to minimum levels. The policy is also expected to attract industrial investment in potable liquor exports and expand ancillary sectors such as distilleries, packaging, logistics and export services, creating significant direct and indirect employment.

Industry players have welcomed the export thrust, especially wineries linked to horticulture and farming clusters. Madhvendra Deo Singh, chief executive of Mbrosia Nature Living, which runs the state’s first fruit-based winery, said the policy marks a shift towards empowering farm-linked enterprises. Singh’s winery manufactures wine under the Maeve label.

“This is a step towards empowerment and uplift of wineries that are connected with granaries and farmers. The policy links agriculture to value addition and opens the door for us to go to international markets,” Singh said. He added that Mbrosia Nature Living is already producing fruit-based wines in line with international standards and sees export opportunities emerging under the new framework.

Singh said more steps were required to build a wine culture and domestic market alongside exports. “Opening wine tasting taverns across Uttar Pradesh will help people experience wine and understand the product better. If consumers across the state can taste and learn about wine, it will strengthen demand and improve brand recall when we go to international markets,” he said. He also said easier label approvals and lower export-linked fees would help smaller wineries scale up without heavy compliance costs.

Liquor to cost more

The excise policy for 2026-27 sets an all-time high revenue target of Rs 71,278 crore, around 13 percent higher than the current fiscal target of about Rs 60,000 crore. It provides for a Rs 10 to Rs 40 increase in the price of Indian Made Foreign Liquor, while prices of Indian Made Wine and low intensity alcoholic beverages are set to come down.

Excise Commissioner Dr Adarsh Singh said there will be a small price increase on IMFL and country liquor, beer rates will remain unchanged, and wine will get cheaper. “We are bringing portal-based transactions at all levels to improve transparency. As we want stability, not many changes have been made to last year’s policy. Our current fiscal target was revised from Rs 63,000 crore to Rs 60,000 crore and we will exceed that. The department will strategise to achieve next year’s target of Rs 71,000 crore,” he said.

Under the policy, composite shops, model shops, premium model shops and retail shops selling country liquor and cannabis will continue through renewal after applications are received. A processing fee of Rs 3,000 has been fixed for applications on the e-lottery portal for changes such as mobile number updates and PAN corrections. Retail shop working hours will remain 10 am to 10 pm. The policy also provides for rounding off the maximum retail price of country liquor and UPML of all strengths except 25 percent v/v to the next multiple of Rs 10, a move expected to generate additional revenue of around Rs 1,500 crore.