How to Start Business of Indian Made Foreign Liquor (IMFL)

Indian-made foreign liquor (IMFL) is the phrase officially used by governments, corporations, and the media in India to refer to all types of hard liquor/alcohol manufactured domestically aside from indigenous alcoholic beverages like feni, arrack, toddy, etc. Whisky, brandy, rum, gin, and vodka are among the distilled spirits included in the IMFL market category.

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Irrespective of the final product, a neutral spirit distilled from molasses is the first ingredient in the numerous IMFLs, setting them apart from spirits/alcohol found elsewhere in the world. First, the 96% alcohol by volume in this neutral spirit is lowered to 42.8% by utilising demineralized water, where additional flavours and alcoholic beverages are used.

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At this point, caramel colouring is optional and is used to give the spirit colour. Most frequently, the spirit is blended with grain- or malt-based spirits, including imported Scotch or Irish whiskey.

IMFL business will flourish in the future. Entrepreneurs planning to start this business will surely benefit. However, proper planning, registration, and licence are required to start an alcohol business in India. NPCS have gathered all information for you to understand this segment better.

The market of IMFL In India

Sales of IMFL (Indian-made Foreign Liquor) increased by 23% between April and September of FY22.

By the end of 2016, the market value of the Indian Made Foreign Liquor (IMFL) category was predicted to exceed INR 1,400 Bn. This was a year-over-year growth rate of over 5% over 2015.

By 2026, this market is projected to be worth more than 3,000 billion rupees, growing at a CAGR of 5.2%.

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NPCS analysts predicted that EMEA will lead the market for alcoholic beverages over the forecast period and may hold around 48% of the market by 2025. Supported product, the alcohol market is subdivided into international liquor, Indian-made foreign liquor, foreign liquor bottled in India, Indian-made Indian liquor, and various others. In 2022, the Alcohol market is dominated by the Alcohol goods category. New product introductions and increasing incidences are anticipated to fuel the expansion of this sector.

Choose your Product

There is a good chance that if you’ve been thinking about starting a liquor business, you’ve already solidified some strong preferences for various types of booze. Choosing your preferred liquor, such as vodka, whiskey, rum, or gin, is a way to combine your love of delectable cocktails with a way to make money. On the other hand, you should also make an effort to conduct research and choose the type of alcohol that will be produced most profitably and appeal to your target market.

Registration and Licence Required

As per Government regulations, a few licences are required before importing or exporting may begin IMFL.

Applicant’s Address proof and the premise used for IMFL manufacturing.
Applicant’s Identity proof
Affidavit Duly Notarized – Declaring actual Possession
Layout Plan
Security Amount (Refundable)
NOC (Fire Department; Municipal Corporation)
License Fee – (May differ)
List of directors, AOA as well as MOA
Photograph of the authorized person
An affidavit stating that the authorized person is not levanter when it comes to payment of dues, and stating that the applicant has no criminal background
Following the interior rules provided by the state government for safety.
Application with business details
Copy of latest Income Tax return
Physical Possession- (Approved by DDA/NDMC/MCD)
Any business personnel must register with Importer-Exporter Code (IEC) in addition to GST, TAX and Compliances, Accounting, Trademark Registration, and creative support in Logo Designing.

Raw Materials and Machinery Requirements

Distillery And Liquor Plant Machinery may cost you certain lakhs of rupees. However, instead of buying online, it is good to check the sample physically. The entire flavour and quality of the product are dependent on the machine. One fault can spoil the whole lot.

Raw materials required

For the creation of alcohol, distilleries use a variety of raw materials, including

Sugarcane juice
Sugarcane molasses
Sugar beet molasses
Wine
Corn

The primary ingredient in most distilled spirits is natural sugar, such as that found in

Honey
Ripe fruit
Sugarcane juice
Palm sap
Beetroot
Milk

The substance of an amylaceous (starchy) nature can be quickly transformed into simple sugars by the addition of suitable malted cereal or by the action of enzymes found in cereals.

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The most significant grain used to make fermentable starchy cereal is maize, sometimes known as corn.

In distilled spirits, malt is crucial. Malt contains soluble proteins that lend flavour to the distillate produced by the fermentation of grain malt mixes, in addition to converting starches from other carbs to sugars.

Start Manufacturing

You’ll need to decide whether you want to source or manage your production when you construct your business plan. Deciding to outsource your product’s assembly will, at least initially, save your costs and help you avoid the complications that come with trying to obtain licences for brewers, wineries, or distilleries. Additionally, the knowledgeable staff at these companies will help you avoid costly errors that could even prevent the launch of your organisation.

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However, many people start their enterprises because they prefer a hands-on approach. Creating your production facility is an option if you want to be fully responsible for the product’s assembly. By doing this, you will have more control over the quality of the alcohol you produce and will likely be more profitable because you won’t be paying a third party to carry out this work for you.

Frequently Asked Questions:

What is Indian Made Foreign Liquor (IMFL), and how is it different from other Alcoholic Beverages?
- IMFL refers to alcoholic beverages produced in India using imported raw materials and following specific manufacturing processes. It differs from other alcoholic drinks like beer or country liquor in terms of ingredients and production methods.
What are the Legal Requirements for Starting an IMFL Business in India?
- To start an IMFL business in India, you need to obtain licenses and approvals from various government authorities. This typically includes licenses from the Excise Department, a manufacturing license, and a liquor distribution license, among others.
What are the Key Steps Involved in Setting up an IMFL Manufacturing Unit?
- Setting up an IMFL manufacturing unit involves several steps, including securing suitable premises, obtaining necessary licenses, setting up production equipment, sourcing raw materials, adhering to quality standards, and complying with taxation and regulatory requirements.
How Can I Market and Distribute My IMFL Products Effectively?
- Effective marketing and distribution are crucial for the success of an IMFL business. You can explore various distribution channels, collaborate with distributors and retailers, invest in branding and promotion, and ensure compliance with advertising regulations and responsible drinking practices.
What are the Challenges and Risks Associated with the IMFL Business in India?
- The IMFL business in India faces challenges such as stringent government regulations, high taxation, competition from established brands, and changing consumer preferences. It’s important to stay updated on industry trends and compliance requirements to mitigate risks effectively.

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Conclusion

NPCS prepares a detailed report for every entrepreneur planning to start an exclusive or much-in-demand business. Contact us if you want more detailed information or a business layout for your IMFL business.

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