“HISTORIC BUDGET WILL BOOST REVENUE GOALS AND DELIVER PUBLIC HEALTH OUTCOMES BETTER” SAYS BAI
“ALCOHOL-IN-BEVERAGE (AIB) BASED TAXATION, ALIGNS KARNATAKA WITH THE GLOBAL GOLD STANDARD”, SAYS VINOD GIRI, DG BAI
BANGALORE, 6 March 2026: Brewers Association of India (BAI) today welcomed the Karnataka State Budget 2026–27, presented by the Chief Minister in the Legislative Assembly, as a watershed moment for excise policy reforms in India. The Budget announced seminal structural reforms to alcohol taxation and regulation.
BAI said that the most consequential announcement for alcobev industry is the explicit Alcohol-in-Beverage (AIB) based excise duty structure from April 2026, which applies taxation based on the actual amount of alcohol in the product. The Budget states that AIB-based taxation targets the alcohol content which is the primary source of negative externalities, which is a fundamental change in State philosophy to move away from revenue maximisation obsession to a robust optimisation of revenue maximisation and public health outcomes. The principle of taxing alcohol in the beverage and not the water is the WHO recommended gold standard for alcohol taxation and is widely followed in most progressive and developed countries in the world.
“The Alcohol-in-Beverage based taxation announced in Karnataka budget is a historic milestone and a beacon for excise policy reforms across India. Linking of taxation with the quantity of alcohol in the product is based on the premise that product to be taxed is alcohol and not water. It is widely followed all over the World now and is encouraged by health bodies such as the WHO. By adopting the need to optimise revenue and public health goals of moderation, the Government has reinforced the State’s image as a progressive reformist leader in country,” said Vinod Giri, Director General, Brewers Association of India.
The Budget also recognises the social role played by alcohol in the hospitality sector and seeks to allow economic opportunities related to brewery and distillery tourism, something that countries such as Scotland, France, and European nations do so well for spirits, wines and beer.
The budget also accepts alcobev sector as the integral part of industrial eco system and has several steps to improve Ease of Doing Business such as full deregulation of government-administered price fixation and simplification of taxation framework. Other major reforms include auto-renewal of manufacturing licences, 24-hour operations for Distilleries and breweries, streamlining of online approvals from 16 to 7 stages, Licence validity extension from 1 to 5 years. These signal a clear intent of the government to promote industry and make the state more attractive for future investments.
“The budget recognises the role played by the alcobev sector in socio-economic fabric of the society and contains several steps to modernise controls and improve ease of doing business. It also underlines the role of the sector in hospitality industry by allowing beer and whisky trails as done in other countries. Its truly a transformative budget.””, says Vinod Giri, DG, BAI.
Budget highlights that Karnataka’s excise revenues have grown 12.7% year-on-year, reaching ₹36,492 crore in FY 2025–26 up to February, with a target of ₹45,000 crore set for FY 2026–27. This fiscal momentum, combined with today’s structural reforms, positions Karnataka as a model for how progressive excise policy can drive both public health outcomes and revenue growth simultaneously.
The Government has indicated that a Draft Report will be placed in the public domain shortly for wider consultations, to be followed by a new comprehensive Excise Bill.
Editor’s Notes:
Brewers Association of India (BAI) is the apex body of the beer industry which represents India’s largest beer makers such as the AB InBev, Carlsberg, and United Breweries (a Heineken company). Its member companies together account for 85% of the beer sold in India. They are also big investors in India operating over 55 breweries worth Rs 25,000 crores of investment, employing over 27,000 people, and create a massive economic impact.
The Aabkari(Abkari) Times magazine occupies a unique niche in the Indian media landscape. As the only Hindi monthly magazine dedicated to alcohol, liquor, excise, and allied industries, it caters to a specific audience with a specialized knowledge base.
