Lucknow: Uttar Pradesh is preparing to scale up its excise economy with an export-oriented policy framework and a sharply higher revenue target of Rs 68,000 crore for the next financial year, as the state looks to transform its liquor sector into a stronger manufacturing and investment-driven industry.
Excise Minister Nitin Agarwal said the upcoming excise policy will focus on building global brands from Uttar Pradesh, rationalising licensing norms and attracting fresh investment, while strengthening enforcement to curb illegal liquor.
“The next excise policy will be export-oriented. Our focus is to build the brand of Uttar Pradesh so that liquor produced here captures a larger share of both domestic and international markets. A few brands from UP have gone global, but their footprint is still very limited,” Agarwal told FPJ.
For the current financial year 2025-26, Uttar Pradesh’s excise revenue target was Rs 63,000 crore. Agarwal said collections had crossed Rs 41,000 crore by December, suggesting the state is on course to meet the annual goal.
The minister said excise revenues in the state have almost doubled in four years. In 2022, the target stood at Rs 36,000 crore. “We are now moving towards Rs 68,000 crore. This growth has been possible due to consistent policy reforms, improved transparency and structural changes in the system,” he said.
A key area of reform under the new policy will be further rationalisation of licensing fees and procedures. The government has simplified the licensing framework over the past four years, but Agarwal said more needs to be done to improve ease of doing business and make exports commercially viable. “The next policy will focus on making the sector more competitive and investment-friendly,” he said.
He attributed the steady rise in revenue to the introduction of e-auctions, wider participation and the dismantling of monopolies. This year, nearly 40 percent of those who secured retail shops through e-auctions were new entrants. “This shows that the monopoly of a few has been broken and confidence in the system has increased,” Agarwal said.
Technology-led monitoring has also reshaped the sector. Under the track and trace system, every bottle sold in Uttar Pradesh is digitally tracked from distillery to retail outlet. “We now have data for every bottle sold in the state. This has significantly curbed the sale of illegal liquor. I can say with conviction that 99.9 percent of liquor sold in Uttar Pradesh is routed through legitimate channels,” he said.
The minister underlined the sharp increase in capital investment in recent years. Earlier, total investment in the excise sector was estimated at around Rs 5,000 crore. That figure has since expanded substantially, with memorandums of understanding worth nearly Rs 30,000 crore signed.
“In 2022, there were only 60 distilleries in Uttar Pradesh. Today, the number is close to 100. A new distillery will start operations in Farrukhabad in March,” Agarwal said, adding that expanding manufacturing capacity is central to the state’s export ambitions.
He said Uttar Pradesh has a natural advantage in grain-based liquor, backed by its large agricultural base. “UP is a major granary. Grains such as wheat and corn support both liquor and ethanol production. Grain-based liquor is gaining popularity in the market, and we want to use this trend to expand production and revenue,” he said.
On the retail side, the government’s experiment with composite shops, where Indian-made foreign liquor and beer are sold under one roof, has boosted collections. According to Agarwal, revenue from these outlets has increased by around 30 percent.
The minister said the government will continue refining the excise framework to attract investment, promote exports, ensure availability of global brands and strengthen Uttar Pradesh’s position as a major excise hub.
At the same time, he asserted that the government does not promote alcohol consumption. “We do not encourage people to drink. There is no government advertising. But since people do consume liquor, it is our responsibility to ensure quality products at affordable prices and to prevent illegal alcohol,” he said.
Government data shows that nearly 40 percent of Uttar Pradesh’s excise revenue comes from country liquor, which is cheaper and largely consumed by daily wage workers and economically weaker sections. Agarwal said this makes strict regulation essential. He claimed that no deaths from illicit liquor have been reported in the state since 2022.
He also pointed to high liquor sales in districts bordering Bihar, where prohibition is in force. “People cross over, consume alcohol here and return. They pay taxes to the UP government. Our responsibility is to regulate legal sales and stop illegal ones,” the minister said.
