In latest relaxation of liquor prohibition law, Gujarat continues walking tightrope

However, in December 2023, the Gujarat government made a landmark change to its decades-old policy by selectively lifting the prohibition law. It allowed serving liquor at ‘wine and dine’ areas in GIFT City via permits. An official press release said the move was aimed at providing a “global business ecosystem.”

Last month, the Home Department further relaxed the law ahead of Christmas to allow the sale of liquor in any Food & Beverage area, including hotel rooms and terraces, in the GIFT City. This will also apply to Indians from outside the state and foreign nationals.

The move marks the latest chapter in the tussle between Gujarat’s decades-old prohibition law and the removal of what is seen as a deterrent to investors.

Navigating the law

When Gujarat was formed in 1960, carved out of the erstwhile Bombay state, it inherited a 1949 prohibition law. Later attempts at relaxing the law often invited protests from Gandhian activists and women’s rights groups.

Thus, even as the state introduced certain changes under then Chief Minister Narendra Modi (2001-14), largely to attract foreign investments, it also tightened surveillance on bootlegging and smuggling of liquor.

For instance, in 2005, non-residents of Gujarat were allowed three-year drinking permits in Special Economic Zones (SEZs) if they were above the age of 21. The state has 20 such SEZs, and they marked the first lowering of the age bar, from 40 years — the earlier limit for a health permit. However, in 2009, the law was amended to introduce the death penalty in cases where casualties were caused by toxic alcohol, after a hooch tragedy left 156 people dead.

The Director of Prohibition and Excise, which provides licences and permits for the consumption of Indian Made Foreign Liquor (IMFL), issued over 45,500 health permits in 2025, sources said.

In comparison, the State Monitoring Cell, an enforcement agency under the Director General of Police (DGP), seizes IMFL worth around Rs 250 crore every year. The liquor is usually smuggled from states like Haryana, Rajasthan, Goa and Maharashtra.

The crackdowns increase around festivals, when police beef up surveillance on the borders. An official said the rate of the liquor seized is decided “by the going rate in Gujarat in the licensed shops”. There is a list of bootleggers whom the police keep a watch on, but convictions in these cases are rare, the official said.

According the official, “Liquor smuggling involves a long chain across several states, beginning from the source to the supplier to the transporter till it finally reaches the bootlegger… it is very difficult to establish this chain unless a bootlegger confesses to the crime”.

In 2016, the prohibition law was further tightened, imposing a punishment of a minimum of two years imprisonment that could go up to 10 years for drinking and possession of alcohol. Drinking in public places can attract a minimum imprisonment of up to six months.

Timing close to Vibrant Gujarat

All moves to relax the prohibition law thus far have been made in the months preceding the biennial Vibrant Gujarat investor summits.

Yu Yoshida, a representative of the Japan External Trade Organisation (JETRO) in Gujarat, told The Indian Express that Gujarat being a dry state made life here “significantly different from that in Japan and other states in India.”

Gujarat has over 350 Japanese business establishments and nearly a hundred Japanese living and working in Ahmedabad and the Mandal-Becharaji Special Investment Region (SIR). Located about 30 km from GIFT City, it is home to the Suzuki Motors and the Honda automobile plants. Yoshida pointed out that despite permits, the SIR does not have a liquor shop.

Ahead of the third Vibrant Gujarat summit, the government relaxed the prohibition law in December 2006. It allowed group permits to foreign delegates visiting the state, and ordered the issuance of liquor permits to 29 hotels with licensed wine shops, with certain limitations. “The number of permits issued under these categories keeps changing as they are valid for a short period,” a prohibition officer said.

With the scope of permits growing, the number of shops selling liquor has risen. From 43 licensed liquor shops in 2014, the number stood at 85 in 2025. Ahmedabad had the most shops (25), followed by Rajkot (10), Vadodara (9) and Bhuj (7). Amreli and Banaskantha also have a licensed liquor shop each.

Alcohol still a taboo

The relaxations notwithstanding, consuming alcohol in Gujarat remains a taboo. Recently, the CEO and Managing Director of GIFT City, Sanjay Kaul, said the prohibition law was an “excuse” for those who, anyway, did not want to do business in Gujarat.

Additionally, despite the longstanding concept of health permits, which allows individuals to drink privately only with another permit holder, such people would be termed darudiyo (drunkard) in the application forms. This descriptor was officially changed in 2014.

The government also dropped the minimum annual salary requirement of Rs three lakh per year as a qualifier for the permit. These changes happened as the state prepared to host the Pravasi Bharatiya Divas, along with the Vibrant Gujarat summit in 2015.

Even in the case of GIFT City, which has around 700 companies employing almost 25,000 people, only around 700 permits were issued in the first year of the relaxation. Employees found the process “too cumbersome”, pushing the government to reduce one bureaucratic level for the permit application.

A source at GIFT City said, “Consuming alcohol is also an expensive affair even in GIFT City, as the cost of liquor is higher than in other states. The Liquor Access Permit (LAP) holder could only drink in the wine and dine area and could take only one guest earlier, which was raised to five later, and now one can get temporary permits for 25 guests at a time.”

No debates in Assembly so far

None of the amendments to the prohibition law has undergone debates in the state Assembly, which has been dominated by the BJP for almost three decades. Given the social attitudes around alcohol, political leaders have largely credited the dry laws, including for the state being “safe and secure for women.”

A top BJP functionary in the state government said on condition of anonymity, “Sometimes when there are issues that could impact a particular class, or law and order, they are avoided for discussion (in the Assembly). However, in a democracy, there is always a possibility for debate.”

Neither Congress nor Aam Aadmi Party leaders have publicly spoken in favour of lifting prohibition, except former Chief Minister Shankersinh Vaghela. But that, too, happened after he left the Congress in 2017. He said in December 2025, “I will tell Narendrabhai (PM Modi) and Amitbhai (Union Home Minister Amit Shah) that if you wish for Gujarat’s well-being… people drink on the sly, people drink spurious stuff and die widowing young women, while bootleggers’ tribe grows unchecked with patronage, for the larger good this is not a political issue…”

Members of the erstwhile royal families of Gujarat, who run heritage hospitality properties, also spoke about how the law was keeping tourists from visiting the state during a conference in 2018. It included Radhikaraje Gaekwad of Vadodara’s Lukshmi Vilas Palace.