The story was reported as part of the 2nd TRC Investigative Reporting Fellowship.

Jhabua/Alirajpur: Into the dry land of Gujarat, a clandestine river flows from across the state border–lakhs of litres of illicit Madhya Pradesh-made liquor, smuggled by a brazen syndicate of overproducing distillers and liquor contractors, hauled by agents with the support of excise and police officials, and tribespeople who give discreet cover.

The Reporters’ Collective investigation into the anatomy of the organised business of smuggling alcohol into Gujarat has led us to Madhya Pradesh’s Malwa region that has been diligently meeting the alcohol requirements of its neighbour for the last three decades.

When the newly formed Gujarat state banned alcohol in 1960, the black market exploded, opening more opportunities for smugglers from neighbouring Maharashtra, Rajasthan and Madhya Pradesh. In comparison with the first two states, Madhya Pradesh began bootlegging in the late 1980s, but it has boomed since 2003 when both the states were governed by the same party.

The Malwa region in due time got the economics of smuggling right. It has four of the state’s 11 distilleries that produce over 43% of the total spirit and three out of four breweries, two border districts – Jhabua and Alirajpur – dotted with liquor shops that are just 500 metres to 15 km away from Gujarat’s, and an impoverished population that rents their land to stash the contraband and offers foot soldiers.

While Jhabua and Alirajpur are used as an entry gate to Gujarat, Dhar, Khargone, Shajpaur and Indore are the backbone of the supply chain, said a senior excise officer requesting anonymity.

But it takes a lot of organisation to get millions of litres from the distilleries in Madhya Pradesh to the streets of Gujarat. From the liquor manufacturers' warehouses in Madhya Pradesh to the transport networks funnelling it into Gujarat, we delve into the smuggling operations, uncovering the trade, its secrets and the faltering efforts of law enforcement to curb the flow of alcohol.

Katthiwada, one of many entry points

To investigate the liquor smuggling network, The Collective’s team visited Katthiwada, a mofussil town with 86% tribespeople in Madhya Pradesh's Alirajpur district, and a feather’s drift away from Gujarat.

Katthiwada is one of the several tehsils (also known as taluks) in Alirajpur and neighboring Jhabua districts that borders Gujarat, and serves as a key gateway for smuggling liquor into the dry state.

As the night falls over Katthiwada, farmers and labourers flock back home, but for 32-year-old Val Singh Bhuriya (name changed), a Bhil tribesperson, the day has just begun.

Bhuriya is one of the many lower-level ‘agents’ of the well-oiled liquor bootlegging syndicate in Malwa region. He joined a gang of liquor smugglers because of poverty after failing in class eight. Later, he made a fortune from it.

Katthiwada’s hilly forests give bootleggers the perfect cover. When night falls, Bhuriya and a small crew load liquor boxes from a godown just 200 metres from Katthiwada’s only government-licensed liquor shop. They pack them into Scorpios, Boleros, Thars, Wingers, ambulances, and SUVs, often bearing Gujarat licence plates.

The smuggling route runs on roads built under the Pradhan Mantri Gram Sadak Yojana (PMGSY) and other village or forest roads. These roads link Katthiwada to Gujarat’s Chhota Udaipur, Dahod, and Godhra's Panchmahal district. Vehicles head towards Madhya Pradesh border villages like Kanchhla, Ghut, Dhakkapura, and Chimata, which connect to Gujarat’s Devgadh Baria tehsil. Others move towards villages like Bada Kheda, Kevdi, and Koliyari near Chhota Udaipur.

At these border villages, Bhuriya unloads the liquor into tin shed warehouses built on rented tribal land. Once he and his crew leave, a convoy of 40-50 vehicles, including ambulances, arrives to load the boxes and smuggle them into Gujarat through the same PMGSY roads.

Parsingh Bhariya (45), a four-time sarpanch of Katthiwada tehsil, standing at the Kanchhla boundary that separates Madhya Pradesh and Gujarat, explains: “Bootleggers pay tribal families ₹10,000 to ₹15,000 a month or ₹10-15 per box to use their fields or empty spaces for storage. It’s a win-win deal for both.”

 The villagers are used to the convoys of vehicles that burst every day through the route connecting the Katthiwada liquor shop to Kanchhla village, leading to Gujarat’s Dahod.

The routine turned into a local sensation on December 24, 2023 when a video capturing the activities of a government-licensed liquor shop’s warehouse went viral. In the minute-long clip, more than 30 cars and SUVs with Gujarat licence plates were seen inside the liquor shop’s godown in Chhaktala village, loading alcohol. The vehicles were reportedly transporting the contraband across the Gujarat border. Chhaktala village in Alirajpur district is less than one kilometre away from Gujarat border.

The state has 3,601 composite liquor shops (where both Indian liquor and Indian-made foreign liquor are sold) that were distributed through renewal/ lottery or e-tender. This year, the excise department auctioned the Katthiwada liquor shop for ₹5.45 crore, a 15% jump from last year. And the liquor shop of Chhaktala village with less than 3200 residents was auctioned at ₹4.96 crore.

Not just Katthiwada and Chhaktala, the state excise department has given all 19 liquor shops of Alirajpur district to Indore-based Khalsa and Company under ‘one contractor-one district’ policy at ₹97.35 crore.

“All the liquor shops that lie on Madhya Pradesh-Gujarat borders are expensive (to bid) because smuggling from those shops is easy,” said Vibhuti Jha, a social worker who defends the tribal rights in the region.

“The liquor shops in villages (bordering Gujarat) are more expensive than those in towns,” said Sena Patel, the Congress MLA from Jobat assembly constituency in Alirajpur. “For example, a shop in Udaigarh, a small tribal town close to Gujarat border, was auctioned at ₹ 13.77 crore this year compared with the two shops of Alirajpur city auctioned at ₹8.41 crore and ₹ 1.24 crore respectively,” she said.

Similarly, a liquor shop in Chandpur village that neighbours Katthiwada was auctioned at ₹10.50 crore.

“Liquor mostly enters Gujarat from rural areas of Madhya Pradesh,” said Rajdeepsinh N Zala, Superintendent of Police Dahod, Gujarat. “While national and state highways are used to smuggle liquor from Haryana, Punjab and Rajasthan or Indore.”

According to the Alirajpur district police, they are on a constant hunt for illegal booze. The district’s police chief SP Rajesh Vyas told The Collective: “We have seized liquors from fields, warehouses, villages and at inter-state check-posts.”

He said, from January 1, 2023 to December 2023, police lodged 2,192 First Information Reports (FIRs) under Excise Act 1915, confiscating 75,080 litres of Indian-Made Foreign Liquor and Indian-made liquor worth ₹20.08 crore. And between January 2024 to September 2024, police seized 90,000 litres of liquor worth ₹2.89 crore in 1,396 cases.

“Liquor shops are just a facade. The profit they make from smuggling liquor and beer to Gujarat is ten times higher than the profit they make from liquor shops,” said an excise department source.

You drink, I burp

The liquor sales data present an intriguing paradox: the two districts of Alirajpur and Jhabua that share the border with Gujarat appear to be consuming more alcohol, that too expensive foreign brands, than other backward districts.

These two districts, where more than 85% of the population are tribespeople and close to 70% of them live below the poverty line, would generate around ₹338 crore in revenue from auction of liquor shops in both the districts this fiscal year—a 15% increase over the previous year, according to the Madhya Pradesh excise department. This is the amount the government expects the liquor contractor to generate as tax revenue from the sale of liquor, and it is arrived at based on previous year’s consumption along with sales potential in the area.

This upward trend in sales raises questions.

In Jhabua and Alirajpur, local staples like Mahua-made liquor and toddy, rather than rum, whiskey, or beer, are central to cultural and social life—from births and marriages to religious rituals and funerals. It means somebody else outside the districts are giving the sales a high.

“Youths who migrate to other cities for employment have developed a habit of drinking beer, but, there is no way tribals can consume Johnny Walker, Red Label, Black Dog, Glenfiddich or others worth crores,” said Mathiyas Bhuria (47), a tribal leader from Jhabua’s Ranapur tehsil, who filed a public interest litigation (PIL) at Indore High Court to curb the illegal smuggling of liquor in the region.

“If tribals are so affluent to afford foreign liquor, why would they migrate as a labourer with families to earn a living? Why would 70% of the district be below the poverty line surviving on a monthly PDS ration?” he asked.

Mathiyas Bhuria, who was the Congress block president from Ranapur (Jhabua), held a press conference on June 24, 2024 accusing the law enforcement agencies of being in cahoots with the liquor syndicate, and took out a protest march on August 5, 2024 against liquor mafia.

Soon, he was removed from his post and the party. A month later, Jhabua district collector externed him from the district for his criminal activities, referring to cases of assault, extortion, Excise act and others pending against him.

Jhabua, a tale of two blocks 

Like Alirajpur, Jhabua, an adjoining district with 87% tribal population, also shares a vast border with Gujarat and is estimated to generate a revenue of ₹238 crore from alcohol sales in the current fiscal year 2024-25. Dotted with small hillocks, it is one of the most backward districts of the state.

Our investigation reveals that Jhabua’s Ranapur and Pitol tehsils are used as entry gates to smuggle liquor to Dahod.

“In festive or marriage seasons, 100-200 trucks pass through Pitol border check post a day,” said Khun Singh Gondiya (45), a sarpanch of the district’s Kalakhunt panchayat, which is metres away from Pitol inter-state border check post.

In May 2024, Jhabua police seized nine trucks of liquor worth ₹15 crore at Pitol’s inter-state check point that were trying to enter Gujarat using fake permit slips. Most of the trucks have Gwalior or Uttar Pradesh registration numbers. The police and excise department lodged FIRs against the drivers and seized the vehicles.

“Why do police lodge FIR against drivers, not against the contractor or distillery owners,” asked Vikrant Bhuria, a Congress MLA from Jhabua. “It has been five months since the trucks were caught, but the probe is yet to begin.”

He alleged that several complaints of rampant liquor smuggling within the district and outside the state to police/excise fall on deaf ears. “I have stopped complaining,” Bhuria said.

At the inter-state checkpoint of NH 59 at Pitol, lying along the road are hundreds of SUVs and trucks bearing number plates of Gujarat, Haryana, Punjab and Madhya Pradesh.

“They all were seized for smuggling liquor to Gujarat,” said Mitthu Singh Damor, a constable of Gujarat’s Dahod district, posted at the Pitol check post. Hundreds of liquor-laden four-wheelers or trucks pass this check post especially late at night or in the early hours when there is minimum security, but we catch those that either look suspicious or when we have tip-offs.”

“Majority of the liquor-laden trucks coming from Haryana and Punjab, pass through highways and most of them get caught,” said Rajdeepsinh N. Zala, Superintendent of Police, Dahod. “Since we are vigilant, only two big trucks were caught in the last 15 months by the state monitoring cell set up to catch illegal liquor flow in Gujarat,” he added.

To assert Gujarat police’s effort to curb illegal liquor smuggling, he said, in September this year, Dahod Crime Branch Police arrested Rameshchandra Rai, a liquor contractor from Madhya Pradesh, who was wanted in three cases of liquor smuggling in Gujarat.

Rai, a native of UP’s Jhansi, is a listed contractor in Madhya Pradesh and a key member of the liquor syndicate. He managed to get out on bail within three days of the arrest and returned to Indore.

Though seizures have been happening at regular intervals, with lower-level drivers or agents getting arrested, in at least one case in September 2022, the link between the smugglers and liquor contractors burst out in the open.

The incident unfolded when a group of smugglers, transporting liquor in tanker trucks to Alirajpur border from nearby Barwani district, attacked Dhar district's Sub Divisional magistrate (SDM) Navjivan Parihar, an IAS officer, and his deputy who had attempted to intercept the convoy. The smugglers also attempted to abduct the officials, pushing the case into a public spotlight too glaring to cover up by merely arresting the truck drivers.

The police filed charges against 19 people, including Manjeet Singh alias Rinku Bhatia, a prominent liquor contractor from Indore and a key member of the syndicate. The seized liquor and vehicles were traced back to Bhatia, leading to raids on his warehouse and his eventual arrest. He got bail in two months.

Rarely are the upper echelons of smuggling syndicates indicted. The last major breakthrough occurred in 2011 when Jhabua police intercepted trucks carrying liquor from Som Distilleries, owned by Jagdish Arora and Ajay Kumar Arora. The distillery, located on the outskirts of Bhopal, produces 1,800 lakh bulk litres annually and, according to excise department sources and court case files, is deeply entrenched in smuggling networks across Madhya Pradesh and Chhattisgarh.

The Aroras, who are brothers, were booked and arrested in 2012. However, in 2015, their names were omitted from the FIR based on the high court’s order. After a 12-year legal battle, a court in Indore in December 2023 convicted 13 people, including five excise officers and Som Distilleries' managers. The court found that they had illegally supplied liquor to Gujarat using fraudulent permits.

In its ruling, the court underscored the complicity of excise officials in enabling the smuggling operation. “This is why police often arrest drivers, not the owners or contractors,” said Rajendra Gupta, a legal observer familiar with the case.

 Modus operandi

The case offered the first rare insight into the nexus of distillers, contractors, smugglers, and excise and police officers. What we unearthed through our investigation and conversations with excise insiders—both current and retired—liquor smugglers, syndicate members, locals and activists further revealed a system riddled with cracks. These cracks, it seems, are precisely where the smuggling thrives.

The liquor business rests on four pillars: distilleries, bottling units, warehouses, and retail shops. While the government sets the excise policy, its enforcement is left to the excise department, aided by the police. Distilleries, breweries, bottling units and warehouses of Indian made liquor are privately owned, while warehouses of Indian Made Foreign Liquor are managed by the Excise Department itself. It’s a carefully constructed framework, but one vulnerable to exploitation.

At the heart of it lies Madhya Pradesh’s 11 distilleries and four breweries that produce 6,365 lakh bulk litres of liquor or beer annually. Close to half of that comes from four distillers in Dhar and Khargone in Malwa.

Once the administrative heart of Malwa under Parmars, Tughlaqs, Mughals, and Marathas, Dhar now leads the state’s illegal liquor trade. Its strategic location, with road connectivity, favorable topography, and proximity to Indore and Gujarat, makes it a hub for underground syndicates.

Excise officials, posted at these distilleries, are supposed to monitor production, verify quality, and record every batch. These officers issue time-stamped permits, specifying the route and deadline for transporting spirits or malt to bottling units. From these distilling units, the spirit moves to bottling units, and warehouses mostly owned by the same powerful contractors or distillery/ beer owners, who dominate the distilleries business.

Once bottled, the liquor makes its way to warehouses. Government officials stationed here are meant to oversee the flow here too, issuing time-bound permits for every movement. Finally, retail shop owners and contractors come in, with licences and payment receipts, to claim their stock. But these processes, meant to safeguard against foul play, are where the twist lies.

The smuggling begins at the distillery stage, where producers exceed permitted production limits often by bribing excise officers, as revealed by Som Distilleries case. Permits are duplicated, and trucks with identical registration numbers fan out—some heading straight to retail outlets, others crossing borders into states like Gujarat.

And then there’s the sleight of hand at bottling units and warehouses. With complicity from excise officials, contractors replicate transportation permits. Multiple trucks, all armed with identical documents, scatter in different directions. If one is stopped, the driver flashes the seemingly valid paperwork, and the operation rolls on.

Retail liquor shop owners who have shops in places adjacent to Gujarat, like Jhabua and Alirajpur districts, bribe the excise officials to issue transportation permits with longer time duration for liquor-laden trucks. For example, to transport liquor to Jhabua from Indore, which is 147 km and would take 3 hours to reach, the officials would issue an eight-hour permit. So, in addition to one permitted trip using the permit, they squeeze in more trips carrying illegal liquor by repeatedly flashing the permit.

The smuggling of illegally made alcohol is causing the state to haemorrhage tax income, which some estimates put at ₹1,000 crore a year. 

In many letters to the Chief Minister, the principal secretary and the excise minister, the Madhya Pradesh Deshi Videshi Madira Vyavasayi Association, an association of liquor manufacturers, flagged the rampant smuggling of liquor and beer to Gujarat from Jhabua and Alirajpur by distilleries and breweries, costing over ₹1,000 crore to exchequer every year.

In a letter sent in September 2020 to the Chief Minister and the chief secretary, they said that except a few, in all distilleries, breweries and bottling units of the state, the liquor is getting out illegally without paying duty (tax) and is being smuggled to Gujarat with the support of authorities.

The letter further highlights that in districts where these plants/factories are, the majority of the liquor shops are owned by distilleries, breweries and bottling unit owners. They directly transport the liquor or beer from the factory to liquor shops, without paying duty and also smuggle it to Gujarat.

“Rampant corruption, political involvement, smuggling and tweaks in several policies have kicked out traditional liquor businessmen from the trade as 60% of the contractors who don’t opt to boost their sales through illegal means are running in losses,” said Jagjeet Singh Bhatia, a key member of association who has been in the liquor trade since 1984.

“If Gujarat lifts the ban on liquor, Madhya Pradesh’s excise revenue will drop to 50% in the Malwa region,” Jagjeet added.

According to a Times of India report from January 2022, Gujarat Police seized an average of 11 bottles of Indian-made foreign liquor (IMFL) every minute in 2021, despite the Covid-19 lockdown. In 2020, 1.53 lakh cases were filed under the Prohibition Act across the state, a figure that rose to 1.69 lakh cases in 2021.

In 2024, following the Election Commission's implementation of the model code of conduct on March 16, police seizures of liquor surged. By April 13, 2024, authorities had confiscated 7,60,062 litres of alcohol worth ₹21.94 crore, marking it as the 11th highest quantity of liquor seized during that period.

Liquor syndicates, similar to those operating in Madhya Pradesh, are active in Gujarat's border districts of Dahod, Chhota Udaipur, and Panchmahal's Godhra. These syndicates take charge once liquor-laden trucks cross into Gujarat from Madhya Pradesh, facilitating swift transportation and distribution. 

The policy malfeasance

Part of the blame for fuelling the smuggling lies with the state’s liquor policies that were shaped by changing political regimes and their political agendas. The liquor policy over the years reflects a cyclical shift between monopolistic one district-one contractor model and fragmented one shop-one contractor policy.

The genesis of organised liquor smuggling can be traced to the one district-one contractor policy brought in to consolidate state control over the alcohol manufacturing business till 2002-03. It benefited big players as it offered the business of an entire district to one contractor and killed competition.

When BJP came to power in December 2003 after a decade of Congress rule, Chief Minister Uma Bharti dismantled the policy in 2003 to break liquor lobby’s support for the Congress and introduced a one contractor-one shop policy, recalled L.A Khan Suri, a retired Excise officer, who served in Indore for over two decades. But in November 2006-07 the state’s new Chief Minister Shivraj Singh Chouhan amended it to allow group distribution to accommodate shops struggling with sales to boost the revenue, just like how grocers jumble blemished fruits in a pack of appealing ones. 

In 2018, when Congress returned to power after a period of 15 years, it revived its one district-one contractor policy in 17 districts, including Jhabua, Alirajpur and Dhar, while in remaining districts, shops were auctioned as per group distribution policy. The successive BJP government that came in March 2020 after toppling Congress, continued this policy until hooch tragedies in 2021 claimed 47 lives. 

Though the state now under BJP follows the group distribution policy, it is the prerogative of the excise department to offer particular districts to one company or contractor through bidding when contractors or companies don’t show interest in buying liquor shops in certain districts on department's fixed rates. Of the 51 districts, eight were auctioned under one district-one contractor policy in the fiscal year 2024-25. Five of them fall in Malwa region namely - Jhabua, Alirajpur, Dhar, Ujjain and Neemuch. 

What is striking is that whether it was the Congress or the BJP, specific exceptions are always persevered for districts bordering Gujarat.

The excise department defends it by saying Jhabua, Alirajpur and Dhar districts were given to one company as there were few takers for liquor shops and the Department may face revenue loss if not given under one district one contractor policy.

One district-one contractor policy promotes monopoly and ends competition in the liquor business, said Haricharan Bhatiya (63), a resident of Barwani district, who has been in liquor business since 1970. Barwani neighbors Jhabua and Dhar districts. “It’s not only easy to deal with one contractor at a time but also convenient to maintain the secrecy of political and administrative patronage and distribution of profits,” he said.

State Excise Commissioner Abhijeet Agrawal said, “We have a robust presence across the state that is why 3.60 lakh cases were filed between April 2022 to 2023-24 (till December),” which is roughly 18,000 cases a month. 

But none of them were against big liquor contractors or distillers.

He further said, “To replace the existing offline way of monitoring, the excise Department is coming up with ‘Common Control Centre’ - a monitoring system to keep eyes on the distilleries, breweries and bottling units from one place.”

As the officials tighten the grip, we are reminded of Shah Rukh Khan’s titular role in Raees. He captures the ingenuity of bootleggers with one question: “What about the Indore highway line?”

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Kashif Kakvi is a Special Grantee of the TRC Investigative Reporting Fellowship, Round Two. With over a decade of reporting experience, Kashif covers stories from Madhya Pradesh and Chhattisgarh.