Karnataka’s new excise regime, which came into effect this week, is expected to reshape the State’s alco-bev market by making premium liquor more affordable while increasing prices of low-cost, high-alcohol-content products. Industry executives said the policy could accelerate premiumisation trends and improve ease of doing business for liquor companies operating in the State.
Chief Minister Siddaramaiah unveiled this change during the 2026–27 State Budget in March, proposing an Alcohol-in-Beverage (AIB)–based excise system, market-linked pricing, and fewer duty slabs. This taxation framework is widely regarded globally as the gold standard for alcohol taxation.
According to a report by The Hindu, prices of entry-level liquor have risen by ₹10-20 for 180 ml packs, while premium imported whiskies could become cheaper by as much as ₹700 per 750 ml bottle.
Alok Gupta, Managing Director of Allied Blenders and Distillers, said the changes could support premiumisation in the market.
“Policy changes will fundamentally bring in greater premiumization. In Karnataka, we see a policy where the new excise structure will bring in lower excise duty on the P&A segment and the luxury segment. It’s a bit of a wait-and-see, but it is a positive step,” he said.
