Alco-bev consumers in Delhi may start to feel the pinch as the state government muses changes to excise policy. As per reports, the Delhi government is looking to hike excise duty and slash fixed retail margins in a bid to increase liquor revenue. This could mean major changes in alcohol prices ahead of the peak festive season in the country.
According to a recent IE report, the new policy is likely to be notified in October. A Delhi government official informed that the final draft of the new excise policy was ready. The policy changes comes at the heels of alcohol sales bouncing back after the capital city reverted to a government-run model in 2022.
However, it seems that the proposal has run into a hurdle after the Delhi Excise Commissioner Ravi Jha was transferred to Arunachal Pradesh last week. The finalised draft proposal is yet to be sent to the Delhi Cabinet and Lieutenant Governor Taranjit Singh Sandhu for approval.
Along with changes to the excise revenue and retail margins, there may be sweeping changes in the timings of serving alcohol in hotels, clubs and restaurants.
The total excise revenue target for Delhi has been set at ₹7,200 crore for the fiscal year 2026-27, slightly more than ₹7,148 crore collected in FY2025-26. To achieve these targets, the government is planning to increase excise duty. However, private players are still unlikely to be allowed into the market.
Currently, the excise duty on alcohol is calculated based on the Wholesale Price (WSP), which differs based on the category of alcohol. An increase in these slabs could increase the tax component, which would be reflected in the retail prices.
According to officials, a fixed retail margin cap of ₹50 on Indian Made Foreign Liquor (IMFL) and ₹100 on foreign liquor per bottle prevents retailers from earning more.
Hence, these shops have little incentive to stock premium imported bottles exceeding ₹1,000. Customers often shop in neighbouring cities such as Gurugram and Faridabad because shops operate without the fixed margin, allowing them to offer heavy discounts and lower overall prices. If these fixed retail margins are removed, shops are expected to draw more revenue.
“For instance, let’s say the price of Black Label in Delhi is ₹3,500, but you will get the same brand for a lower price like ₹2,400 in Gurgaon. This can be addressed once the fixed margins are removed,” the official reportedly told media. He added that the number of premium liquor stores in Delhi could increase.
However, Vinod Giri, Director General of the Brewers Association of India, told IE that liquor prices would rise If excise duty was increased. He explained that the price hike could have a "multiplier effect" since a rise in excise duty lifts the base price. This, in turn, could affect the retail margin calculated on the base price.
