Overview of the Fermentation Industry in India

The process of fermentation has been popular for centuries due to its various uses. Today the benefits of fermentationare being applied in the food industry, pharmaceutical industry and most of the alcohol and beverage industry. Industrial fermentation involves using microorganisms, like fungi and bacteria, to make commercial products on a large scale. The alcohol manufacturingindustryis based on the process of fermentation of agricultural products to make alcoholic beverages like whiskey, vodka, beer, etc. Alcohol manufacturing can be grouped into three heads depending on the process they apply, i.e. distillation, malting and brewing.Fermentation Industry uses ethanol fermentation in the production of alcoholic beverages.The fermentation process is used to brew, distil and malt alcoholic products.

Industrial Fermentation Process

Fermentation applied for production is also known as ethanol fermentation. It is used in the industrial-scaleproduction of alcoholic beverages like beer, wine, biofuel, etc. The end product is alcohol (ethanol) and CO₂. The reaction includes the breaking down of Pyruvic acid into acetaldehyde and CO₂. In the next stage, ethanol is formed from acetaldehyde. To carry out this fermentation, yeast and some bacteria are used. Enzymesthat are used to catalyse this reaction are pyruvic acid, decarboxylase and alcohol dehydrogenase.

Fermentation Industry in India

Fermentation Industry using Distillation: Distillery units of sugarcane molasses, cereals and many other agro products for producing alcoholic beverages. Production of distilled alcoholic drinks depends on the proximity of the industry to the source of its raw material. The distillery industry today consists of 2 parts, potable liquor and Industrial alcohol. The potable distillery-producing liquor has a steady demand with a growth of 8 per cent per annum, and 52 per cent of the alcohol produced through distillation is used as potable liquor while the rest 48% is used in different industries.

Fermentation Industry using Malting: The process of malting involves three steps. First is soaking the barley to awaken the dormant grain (also known as steeping). At the next stage, the grain is left to germinate and sprout. At the final stage, heating or kilning is done with the sprouted grain to produce the final colour and flavour. The malting process is used in different stages to manufacture various kinds of liquor. Such units are gaining popularity due to the profits associated with the malting process and the demand for quality malted beverages.

Fermentation industry using Brewing: Brewing is the process of producing beer by steeping a starch source (barley, rice, rye, corn) in water and fermenting this liquid with yeast. Beer is the 2^nd most popular beverage after tea and the most popular alcoholic drink. The average volume of beer consumed per person in India is expected to be 3.39 L in 2022. The beer demand in India is expected to grow by 11.41% (CAGR 2022-2025) annually.

Licences needed to Start Fermentation Industry in India

The state's Excise Commissioner has been given the power to grant manufacturing licences for distilleries, malteries or breweries subject to meeting some minimum requirements by the licensee/applicant.A partnership firm or a legal company may apply to the Commissioner of Excisetoestablish a liquor manufacturing unit and obtain a licence to manufacture liquor in Form E-15 Rules 41, 42 and 43.

Microbrewery/Distillation/ Malting Licence

To obtain this license, the application must be made to the Excise Department of the State Government in which the brewery/distillery or maltery will be set up. The following are the standard requirements and documents that must be met before setting up a distillery, maltery or brewery.

General criteria for Application for Liquor Manufacturing Licence

• Applicant should have attained the age of majority

• He must possess a permit for a private bonded warehouse in Form E-12 (Rule 22)
• The licensee should execute bond in Form E-5, E-6 and E-11 (as the case may be)

• The licensee should requisition services of E.I. for supervision of his unit from the Commissioner of Excise.

General Documents Required for Liquor Manufacturing Licence

• A duly filled Application, along with the court fee stamp, must be submitted.
• Plan of the building
• Challan evidencing payment of Rs.20,00,000/- (non-refundable).
• Site plan
• The estimated cost of the project and the calculated capacity of production.
• Pollution NOC from the concerned Pollution Control Board.

• Project report

• Commercial Electricity and water connection
• Proof of Land Registration
• MOA, AOA and Company Registration
• NOC from Inspection of Factories and Boilers
• Consent NOC from PCC/SPCB
• Income Tax Clearance 
• No Objection Certificate (NOC) from Labour Department
• GST Registration Certificate 

Additional Licences Required

Brewery

• Brewery Licence
• Beer Storage Licence

Distillery

• Molasses Licences
• License to manufacture plain spirit in a distillery
• Licence for sale of spirit
• Spirit Storage License

Country Spirit Bottling Plant Licence

• Country Spirit Storage license
• Country Spirit Bottling License
• Country Spirit Wholesale Licence

Additional Licences and Authorisation Required by Distillery, mantery and brewery

• Liquor Distribution License
• Shop and Establishment License 
• Health and Trade License
• Fire Safety License
• FSSAI Licence
• Factory Licence
• CGWA NOC (for the abstraction of groundwater)

Scope of the Fermentation Industry

The advent of ethanol as an ideal blend for admixture with petrol has further boosted the fermentation industry. The importance of this industry is set to increase further in the country’s growing industrial scenario. While consumers highly prefer spirits like country spirit, vodka, brandy, whisky and rum in India, a rising segment of consumers are shifting towards beer owing to its lower alcohol content. The growth of this industry is also reinforced by the significant decrease in distribution costs in India and the easing of the licensing process for liquor shops and outlets that serve liquor.

How will Enterclimate Assist You?

One-Stop Solution to all Legalities Enterclimate provides end-to-end support for all legalities to set up a fermentation industry. We provide all-inclusive assistance for setting up a distillery, brewery or maltery from the start to the end.

Expert Solutions by a Seasoned Team Our team comprises experts from the domain of law, CS and CAs who makes the licencing and authorisation process a hassle-free experience for any business in any corner of the country.

Post-Compliance and Customer Support our communication with clients is always seamless, and all their queries are dealt with precisely. We also ensure that our clients are kept updated for any changes in provisions of law which might affect their business.