Facing rising drug abuse in the region, the Ladakh administration has approved a new Excise Policy, arguing that years of restricted liquor access may have driven locals toward substance use.
The policy, approved by L-G Vinai Kumar Saxena, aims to tackle rising drug dependence and revenue leakages by expanding regulated liquor availability while increasing the UT’s tax base.
According to an official statement, the new Excise Policy marks a significant reform in Ladakh’s excise regime, introducing a liberalised, transparent, and technology-driven regulatory framework designed to balance public convenience, tourism promotion, revenue optimisation and effective liquor regulation.
The policy follows extensive consultations with civil society organisations, NGOs, religious groups, public representatives, and government officials over recent months.
“One major concern raised was the increasing dependence on narcotic substances and psychotropic drugs, particularly due to the unavailability of hard liquor in Ladakh, prompting individuals to resort to illegal drugs and smuggled or spurious liquor,” the statement read.
A committee of officials was subsequently formed to draft a revised Excise Policy. The committee closely examined public convenience, prevention of illicit liquor trade, societal impact, excise revenue augmentation, transparency in vend allotment, licensing procedures, digitisation of processes, and strengthening enforcement.
A key feature is the liberalisation of the previously restrictive regime, which had limited brand and outlet availability, creating an “artificial scarcity” that often deterred tourists. “Tourists often carried liquor from outside Ladakh, causing revenue loss. The policy addresses this scarcity by expanding lawful supply channels under strict regulatory oversight,” the statement added.
Under the new policy, retail sale of hard liquor, including Foreign Liquor and Indian Made Foreign Liquor (IMFL), is now permitted. Earlier, only beer, wine, and Ready-to-Drink (RTD) beverages were allowed.
For the first time, retail liquor vends are allowed in guest houses and homestays upon payment of license fees. Previously, only hotels could serve liquor. Beer bars with microbreweries are now also permitted in Ladakh.
To improve access and regulated availability, 20 liquor vends will open through e-auction, compared to just two previously. Liquor will now be sold in new districts – Nubra, Changthang, Sham, and Zanskar – improving accessibility for tourists. Earlier, liquor was limited to Leh city.
Consumption is now allowed within hotel premises, including rooms. Previously, liquor consumption was restricted to bars. Serving liquor at private events is permitted upon payment of a fee; earlier, it was prohibited.
To optimise excise revenue, the annual wholesale license fee has increased from Rs 3.5 lakh to Rs 5 lakh. The base price for retail vends has also been revised: Rs 60 lakh in Leh municipal wards and Rs 30 lakh elsewhere. Retailer profit margins have been reduced from 12% to 10%, the statement read.
The L-G said the revised policy aims to establish a balanced framework addressing public concerns, strengthening oversight, facilitating tourism and economic activity, preventing illegal trade, and reducing narcotic dependence through lawful channels.
The policy includes robust enforcement and consumer protection measures. Stringent penalties, including license cancellation and EMD forfeiture, apply to retailers selling liquor above the Maximum Retail Price (MRP).
