When the European Union can have free trade across countries, why not India? Unfortunately in India each state and UT is a country by itself, as it has its own rules when it comes to the alcobev industry. No two states or UTs have similar alcohol policy which is a major roadblock.
In the wine industry, states like Maharashtra have given excise duty concession and are encouraging wines. But when wine from Maharashtra comes to Karnataka, it is again subjected to taxation and import fee. This adversely affects the trade of wine produced in India. It becomes difficult to bring economy of scale by establishing one big unit to serve all over India.
To avoid double taxation, you need to have units at multilocations, for example a winery in Maharashtra as well as a winery in Karnataka. Same is the case with beer. In European countries and South Africa, we find mega breweries. In India, it is not possible to set up such breweries because of import/ export levies imposed by states. I think the only thing which can benefit from the Make in India campaign is Scotch whisky which can be imported in bulk at a higher alcohol strength of 60% to 65%. This higher strength can be brought down by adding DM water. This Scotch can be re-exported at a competitive price due to low cost of operations. The Scotch finished at 40% volume made in Scotland costs more and it also has a shipping cost. In the case of liquor products, India can undoubtedly become a major producer because here the cost of raw materials and production is low. For this to happen, the first major requirement is to facilitate free inter-statet rade in the country.