New Delhi, April 22 -- The Congress-led government in Karnataka has proposed a policy to tax liquor based on the actual content of alcohol in the beverages. If implemented, the policy will potentially change the pricing landscape of the spirits industry.

Karnataka is home to Bengaluru, one of India's most lucrative liquor markets, with its large base of young techies and multinational workforce.

The immediate effect of the policy could be an increase in prices of budget liquors, likely to be borne by low-income consumers. Karnataka levies the highest excise on liquor at 83% as per the existing system.

"A sharp increase in prices here will undoubtedly disrupt the market dynamics and is a slow poison for our trade," Wine Merchants Associ...