The Union Government has repealed the Lakshadweep Prohibition Regulation, 1979, paving the way for the regulated sale of alcohol in the Union Territory through a licensing framework. The move marks a significant policy shift for the archipelago, where alcohol sales had remained largely prohibited for nearly five decades, except for limited exemptions at select tourist facilities.
The repeal was notified through a Gazette notification issued on June 5, 2026. The new Lakshadweep Excise Regulation, 2026 will replace the prohibition regime and establish a framework governing the manufacture, possession, import, export, transport, purchase, sale and consumption of alcoholic beverages in the islands.
Under the new regulation, licensed entities will be permitted to engage in alcohol-related activities, while government-owned corporations and agencies will also be eligible to obtain licences for importing and retailing liquor. Authorities have clarified that the new framework does not create an unrestricted market for alcohol. The Administrator will retain powers to regulate sales, impose limits on possession and consumption, and prohibit alcohol in specific areas or across the entire Union Territory if required.
The regulation prohibits the sale of alcohol to individuals below 21 years of age and introduces a high taxation structure. Excise duties have been fixed at 400 per cent on Indian Made Foreign Liquor (IMFL) and imported foreign liquor, 200 per cent on beer and 80 per cent on wine.
Lakshadweep, comprising 36 islands of which 10 are inhabited, has historically maintained one of India’s strictest alcohol control regimes. The prohibition law was introduced in 1979, reflecting the social and cultural context of the islands, where Muslims constitute the overwhelming majority of the population. Over the years, successive administrations retained the policy, citing local preferences and social considerations.
Despite the prohibition, alcohol remained available under limited exemptions at government-approved tourist establishments and resorts, particularly on Bangaram and Kavaratti islands, catering primarily to visitors.
The introduction of the new excise framework is expected to have implications for tourism and hospitality development in the archipelago. Lakshadweep has been receiving increasing attention as a leisure destination, with authorities seeking to expand tourism infrastructure while balancing environmental and cultural sensitivities.
Tourists visiting Lakshadweep are required to obtain special entry permits, while foreign visitors are currently permitted access only to selected islands, including Agatti, Bangaram and Kadmat.
Officials have indicated that the new regulation is intended to create a structured and regulated system for alcohol sales while preserving the administration’s authority to manage consumption in line with local requirements and future tourism development plans.
