Telangana Leads in Alcohol Tax Revenue

India’s alcoholic beverages industry is a significant contributor to government revenue and economic activity. According to a report by the International Spirits and Wines Association of India (ISWAI), the industry generated approximately ₹4 lakh crore in tax revenue for the Central and state governments in the financial year 2025, accounting for around 6.6% of the country’s total tax collections. Telangana ranked first among states in the share of alcohol taxes in its own tax revenue, at 32%. Tamil Nadu followed at 27%, while Uttar Pradesh stood third at 25%. Across India, alcohol accounted for an average of 19.1% of states’ own tax revenue. The industry’s tax contribution has increased considerably from ₹2.40 lakh crore in FY2021.

The report estimated the market size of India’s alcoholic beverages industry at ₹6.20 lakh crore in calendar year 2025, equivalent to approximately 1.8% of the country’s nominal GDP. The sector also supports employment across agriculture, manufacturing, packaging, hotels and restaurants. However, ISWAI CEO Sanjit Padhi expressed concern over governments’ heavy dependence on alcohol-related revenue. While Telangana leads in the share of tax revenue derived from alcohol, Karnataka tops the country in sales volumes. The reported figures show sales of 6.88 crore cases in Karnataka and 6.44–6.47 crore cases in Tamil Nadu. Telangana recorded 3.71 crore cases, followed by Andhra Pradesh at 3.55 crore cases. Maharashtra, Uttar Pradesh, Kerala, West Bengal, Rajasthan and Delhi complete the reported top ten list.