Alcohol sales allowed in Muslim-majority Lakshadweep

New Delhi ( Raghwendra Pratap Singh) : For the first time in 47 years, the Muslim-majority Union Territory of Lakshadweep is set to permit the regulated sale of alcohol through licenced outlets after the Union government repealed the Lakshadweep Prohibition Regulation, 1979. The law had largely kept the archipelago dry since its enactment, with limited exceptions for government-run bars and tourist resorts on Kavaratti and Bangaram Islands.

The prohibition law was repealed through a Gazette notification issued on June 5, which stated that it "shall come into force on such date as the Administrator may, by notification in the Official Gazette, appoint".

The new Lakshadweep Excise Regulation, 2026 replaces the prohibition regime with a licencing framework governing the manufacture, possession, import, export, transport, purchase, sale and consumption of liquor. It also allows government-owned corporations and agencies to obtain licences for importing and retailing alcoholic beverages.

However, taxes related to alcohol have been kept high. Excise duties have been fixed at 400% on Indian Made Foreign Liquor (IMFL) and foreign liquor, 200% on beer and 80% on wine. For context, a 25% VAT is charged on IMFL, beer, wine and imported foreign liquor in Delhi.