March 01, 2025 – A recent decision by the Supreme Court (SC) to impose a ban on liquor sales near highways continues to stir concerns across India’s hospitality and tourism sectors. Industry leaders are sounding the alarm, predicting significant job losses and a devastating blow to tourism, as the ripple effects of the ruling threaten to unravel years of growth in these vital economic areas. The ban, originally aimed at curbing drunk driving, has sparked a heated debate about its unintended consequences on businesses and livelihoods.
The Supreme Court’s order, which prohibits liquor sales within 500 meters of national and state highways, has been in place for several years but remains a contentious issue as businesses grapple with its fallout. Hospitality bodies estimate that the restriction impacts over 60% of the industry, particularly hotels, restaurants, and bars located along key travel routes. These establishments, often dependent on alcohol sales for a substantial portion of their revenue, now face an uncertain future.
According to industry insiders, liquor sales account for up to 15% of total earnings in premium hotels and even more in smaller establishments. The ban doesn’t just hit the food and beverage segment—it also jeopardizes revenue from events like meetings, conferences, and exhibitions, which often rely on the availability of alcohol to attract clients. With many high-end properties situated near highways, the ruling could lead to a 25–30% drop in overall income for affected businesses, pushing some to the brink of closure.
The potential for job losses looms large. The hospitality sector is a major employer, supporting millions of workers ranging from bartenders and waitstaff to suppliers and event organizers. Experts warn that if the ban forces widespread shutdowns, over 100,000 direct jobs could vanish, with indirect losses potentially reaching ten times that number. The travel and tourism industry, which contributes nearly 9% to India’s GDP and employs millions, could see a sharp decline in growth as businesses scale back or shutter entirely.
Tourism, a cornerstone of India’s economy, is also under threat. Popular destinations like Goa, Pune, and the National Capital Region (NCR) are particularly vulnerable, with highways running through or near their core hospitality zones. In Goa, for instance, almost the entire state is crisscrossed by national highways, leaving few establishments untouched by the ban. Tourists, especially international visitors who expect alcohol as part of their experience, may opt for destinations unaffected by such restrictions, further eroding India’s appeal as a global travel hub.
Hospitality bodies have called the ruling a “misstep” that fails to address the root cause of drunk driving while punishing legitimate businesses. They argue that stricter enforcement of traffic laws and public awareness campaigns would be more effective than a blanket ban. “Closing down bars and restaurants won’t stop reckless behavior on the roads,” said a spokesperson for a leading industry group. “Instead, it’s killing jobs and driving away tourists who fuel our economy.”
The financial toll is staggering. Initial projections suggest states could lose up to ₹50,000 crore in tax revenue, while the hospitality sector might forfeit an additional ₹10,000–15,000 crore in earnings. This comes at a time when the industry is still recovering from the economic scars of the COVID-19 pandemic, making the ban a bitter pill to swallow for many. Small businesses, already operating on thin margins, are especially at risk, with some owners reporting canceled bookings and postponed events as customers seek alternatives elsewhere.
Efforts to mitigate the damage have met with limited success. Some states have attempted to reclassify highways as local roads to bypass the ban, but such measures are slow and often impractical. For large hotels, relocating isn’t an option—moving a ₹500-crore property simply isn’t feasible. Meanwhile, the rise of illegal liquor sales and bootlegging has emerged as an unintended consequence, further complicating the situation.
As the debate rages on, hospitality leaders are urging the government to intervene. They propose a balanced approach that safeguards public safety without sacrificing economic stability. Whether policymakers will heed their calls remains uncertain, but one thing is clear: the Supreme Court’s liquor ban has unleashed a storm that could reshape India’s tourism and hospitality landscape for years to come. For now, businesses brace for tough times ahead, hoping for a solution that keeps their doors open and their workers employed.
