India is the fastest growing economy in the world since past few decades its tourism has increased drastically, one of the major contributor of GDP is liquor market, India has its our culture of preparing Liquor which is directly, indirectly connected to the cultural ,climatic inheritance of the country however restrictive government policies continuous to keep Indian local liquor out of the economic importance. The purpose of this paper is to contribute authors thoughts on how local liquors can effect tourism including GDP and economy of the nation. Many different factors determine the performance of the tourism industry in addition to the contribution of the local drink industry .These include cost competitiveness, other competitiveness factors such as management, quality of services, product, international economic conditions, promotion and marketing ,access and competing location and last but not the least government policies. This policy paper will offer an analysis on Indian local liquor policies, importance and its significance on Indian tourism. This paper examines the issues facing the local liquor industries in India and suggesting liberalizing the sector for specific advantages to various stakeholders.