The Jammu and Kashmir government has mobilised Rs. 2,152 crore in revenue from the auction of retail liquor vends over the past two financial years, underlining the growing fiscal importance of alcohol sales in the Union Territory’s tightly regulated market.
According to official data, the government generated Rs. 1,03,462.49 lakh in 2023–24 and Rs. 1,11,816.07 lakh in 2024–25 through the auction of liquor shops. Despite the healthy growth trajectory, the UT administration has clarified that it does not intend to open new liquor outlets in the current financial year and no fresh JKEL-2 retail licences are proposed.
The revenue profile continues to be heavily skewed in favour of the Jammu region, which accounted for Rs. 1,96,830.06 lakh over the two-year period. In contrast, the Kashmir region contributed Rs. 18,448.50 lakh, reflecting both demographic and socio-political consumption differences between the two regions.
District-wise data show steady growth across key centres. Jammu district alone generated Rs 48,350.15 lakh in 2023–24, rising to Rs. 50,913.93 lakh in 2024–25. Udhampur reported Rs. 11,322 lakh and Rs 12,061.50 lakh in the respective years, while Kathua recorded `10,653 lakh and Rs. 11,272 lakh.
Srinagar registers Revenue Increase
In the Kashmir Valley, Srinagar saw revenues increase from Rs. 5,489.67 lakh to Rs. 6,557.66 lakh year-on-year. Anantnag’s collections rose from Rs. 1,403.50 lakh to Rs. 1,999.50 lakh, and Baramulla posted Rs. 872.23 lakh in 2023–24 and Rs. 1,139.84 lakh in 2024–25.
Officials reiterated that all liquor licences are issued strictly to domiciles of Jammu and Kashmir in line with the J&K Excise Act, 1958, and the excise policy notified periodically.
The current revenue momentum is particularly significant when viewed against the region’s recent history. In the early 1990s, separatist violence in the Valley led to the forced closure of cinema halls, wine shops and other lifestyle establishments. Retail alcohol sales in Kashmir virtually disappeared for years, leaving hundreds of families without livelihoods.
With gradual improvements in the security environment, select cinema halls, beauty parlours and liquor shops have resumed operations, though the Valley remains socially and politically sensitive to alcohol retail. As a result, the retail footprint in Kashmir is far smaller than in Jammu, where consumption patterns are more aligned with neighbouring north Indian states.
High Auction Premiums
For the alcobev trade, J&K presents a unique operating environment. The market is fully auction-driven at the retail level, with limited licences and high entry barriers. This scarcity model tends to push up bid premiums, making retail vends capital-intensive but potentially lucrative in high-footfall districts such as Jammu.
Brand portfolios in the UT are dominated by Indian Made Foreign Liquor (IMFL), with whisky accounting for the lion’s share of volumes, followed by rum and vodka. Beer demand is seasonal and largely concentrated in Jammu, while premium and imported categories remain niche but are gradually expanding in urban pockets.
The government’s decision not to issue new JKEL-2 licences this fiscal suggests a policy focus on revenue optimisation rather than retail expansion. For suppliers, this means growth will likely come from premiumisation, better brand visibility within existing outlets and increased tourism-driven consumption rather than an increase in retail touchpoints. As Jammu and Kashmir balances social sensitivities with fiscal priorities, the excise-led revenue stream is clearly becoming a stable contributor to the Union Territory’s finances.