Govt to scrap alcohol licensing

The major beneficiaries of the move would be foreign liquor manufacturers as they would not have to seek tie-ups with Indian partners holding a brewing licence and instead set up their own breweries. Potable liquor refers to alcoholic beverages like whisky,beer and rum.

In a move which would further deregulate the potable liquor sector,the government has decided to scrap the mandatory licensing policy for manufacturers. The major beneficiaries of the move would be foreign liquor manufacturers as they would not have to seek tie-ups with Indian partners holding a brewing licence and instead set up their own breweries. Potable liquor refers to alcoholic beverages like whisky,beer and rum.

Though the government allows 100% foreign direct investment in potable alcohol via the automatic route,the licensing requirement was a stumbling block for foreign manufacturers. Since seeking licences was a cumbersome and time-consuming process as it is granted by state governments,overseas manufacturers often sought tie-ups with domestic players having licences.

The move would also bring potable liquor on a par with industrial liquor,which has already been de-licensed.

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Officials said the proposal has the backing of both the department of industrial policy and promotion (DIPP) and the home ministry.

However,many state governments have raised objections since the abolition of licenses would deprive them of revenues.

The government has set up an inter-ministerial committee comprising officials from ministries of commerce and industry,law,food processing and finance to look at ways to compensate state governments for the loss of revenue.

The law ministry has cautioned that no Centre-state dispute should arise from the measure.

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The inter-ministerial committee would also take a cue from a similar policy currently being framed for the wine sector. The food processing ministry is working on a comprehensive policy to give a boost to wine making and its consumption in the country. The steps being considered include putting in place a uniform tax and duty regime for wines across all states,allowing its sale in department stores and setting up wine parks with common infrastructural facilities.