Budget 2026 is just right around the corner, with Union Finance Minister Nirmala Sitharaman presenting the Union Budget 2026-27 on Sunday, February 1, 2026. The session will mark her ninth consecutive Budget and the third full Budget of the Narendra Modi-led NDA government. However, the main concern remains: will the new Budget increase alcohol prices? Here’s what we know – and you should know too!
The Union Budget 2026-27 is being looked at with anticipation and optimism. The USD 44 billion market (roughly INR 4,400 crore) could either make it or break it with the new Budget, depending on how policies align.
The Indian alcoholic beverage industry has emerged as one of the world’s growing liquor markets. Many global trackers and data organizations like the IWSR (International Wine & Spirit Research) have shown that the industry showed 6% volume and 9% value growth in 2024.
IWSR and other global organizations see India as a key global growth engine over the next decade. However, this growth will ride on the Budget allocations, tax regimes, and excise policies shaped by the Union Government.
For companies that depend on imported alcohol, custom duties remain a big challenge in India. Imported wines and spirits are taxed heavily, with basic customs duties ranging from anywhere between 50% to 150%, along with additional charges. On top of that, nearly INR 1.52 lakh crores are tied up in customs disputes across industries. This has caused many alcohol consignments to get stuck in lengthy assessments and high storage costs.
Industry giants are pushing for a one-time customs amnesty, similar to the “Vivad se Vishwas” scheme. They are also pushing to rationalize eight basic duty slabs down to five or six – to avoid classification disputes and inverted duty structures that can make bottled imports cheaper than bulk spirit for local bottling. A more uniform duty structure, as requested by alcobev industry experts, can reduce the ambiguity that often leads to misclassification and subsequent penalties.
If the finance minister agrees, premium imports could see strong growth. In 2023, the segment grew by 74% driven by a young, urban demographic. Easier customs rules could encourage investment in better storage, duty-paid shops, and specialized retail. However, if no change is made, importers warn that working capital can stay trapped at ports and increase business complications in India.
The alcobev industry does not seek a zero-tax environment from the 2026 budget but a more predictable business environment. A budget that prioritizes the digitization of the ICEGATE System – India’s own eCommerce-Portal of Central Board of Excise and Customs. The industry is expecting a more seamless integration of ICEGATE with state excise portals.
India and the European Union have concluded negotiations and landed up on a historic Free Trade Agreement (FTA) after nearly two decades. In 2007, the Bilateral Trade and Investment Agreement was proposed and in 2026, it finally culminated in a pact opening up markets accounting for nearly 25% of global GDP.
The European Commission will halve beer tariffs, while duties on spirits will be reduced by around 40%. Tariffs on wine will drop by 20 to 30% as well. The European Union has stated that the agreement will remove or reduce duties on over 90% of EU goods exported to India.
The India-EU Union is bringing a 20 to 50% tariff cut on beer and spirits. Moreover, whether the 2026 budget makes alcohol cheaper and eases tariff restrictions remains to be seen. However, data and industry reports only suggest that the issues that the industry is facing are becoming too high to ignore.
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