PTC Web Desk: For the first time in nearly five decades, Lakshadweep will allow the regulated sale of alcohol through licensed outlets after the Union Government repealed the Lakshadweep Prohibition Regulation, 1979.

The new rules came into effect on June 5 with the introduction of the Lakshadweep Excise Regulation, 2026. The regulation replaces the long-standing prohibition law and establishes a licensing system for the manufacture, import, export, transport, sale, purchase, possession and consumption of alcoholic beverages.

While alcohol sales will now be permitted under strict regulations, the administration has retained significant control over its distribution and consumption.

New policy allows controlled sale of alcohol

Under the new framework, government-owned corporations and agencies can obtain licences to import and retail alcoholic beverages in the Union Territory.

The administration has also imposed steep taxes on liquor. Excise duty has been fixed at 400% on Indian Made Foreign Liquor (IMFL) and imported foreign liquor, 200% on beer and 80% on wine.

Authorities have clarified that the policy does not create an unrestricted liquor market. The Administrator will continue to have powers to regulate consumption, set limits on purchase and possession, and even reimpose prohibition in any part of the archipelago if required. Sale of alcohol to individuals below 21 years of age remains prohibited

Why was alcohol banned in Lakshadweep?

Alcohol prohibition was introduced in Lakshadweep in 1979, largely due to the islands' social and cultural background. Muslims account for around 97% of the population, making it India's most Muslim-majority Union Territory.

According to the 2011 Census, nearly 95% of Lakshadweep's residents belong to Scheduled Tribe communities.

Successive administrations retained the prohibition law, arguing that it reflected local traditions and community preferences. Political parties and social organisations in the islands frequently opposed attempts to expand alcohol availability, citing concerns over addiction, social issues and public order.

However, the prohibition was never completely enforced across all sectors. Limited exemptions allowed alcohol to be served at select tourist resorts and government-run establishments, particularly on Bangaram and Kavaratti islands.

Tourism push behind the policy shift

The Centre's growing focus on tourism development is widely seen as the main reason behind the policy change.

Officials have often argued that strict prohibition made Lakshadweep less competitive than other Indian Ocean tourist destinations, especially the Maldives, where alcohol is available at designated resorts.

The tourism push gained momentum after Prime Minister Narendra Modi's visit to Lakshadweep in January 2024. Images from his trip showcasing the islands' beaches, marine life and water sports attracted widespread attention and helped promote Lakshadweep as a domestic alternative to international island destinations.

Tourism numbers have risen sharply in recent years. Government data shows tourist arrivals increased from 3,875 in 2020 to more than 68,000 in 2024, marking a significant rise in visitor footfall.