reason for a cheeky tipple. Pricey hotels get exemptions from dry-day rules in the interests of promoting tourism. Gujarat, a dry state since its creation, recently allowed booze to flow freely in GIFT City, a startup special economic zone it aspires to turn into a global financial centre. And nothing can replace the warm fuzzy feeling of those delicious liquor taxes. Indian states are abstemious in the streets and drunk on their spreadsheets. In 2017 India introduced a nationwide goods and services tax (GST) to replace a baffling array of state levies. It was a much-needed reform that blended the country into a smooth single market, but left states without the ability to set taxes in response to their own needs. Partly as a result of this, their indebtedness has grown. Yet states have been spaffing plenty of money on handouts and other bungs to voters. Most of them are strapped for cash. What to do? As with many problems, the answer is found in drink. GST left two main areas for states to tax independently: energy and booze. Raising levies on fuel is politically difficult and feeds into the prices of everything. But just a fifth of Indian men admit to drinking at all and only 1% of women do. Even before the GST reform many states saw alcohol as a convenient source of rent, raising duties and imposing labyrinthine licensing rules. After GST it became existential. Yet taxes cannot rise too much. Consumers will switch to cheaper stuff or to moonshine (deaths from methanol poisoning are depressingly common). Nor can states be seen to loosen rules and promote drinking. Prohibition remains popular, especially among poorer women who bear the burden of their husbands’ alcoholism. States must somehow raise duties, but not too much, and keep the drinks flowing, but not too freely. It is in search of this difficult balance that Karnataka—whose capital, Bangalore, has excellent pubs—formed a committee to look into excise reform. Its draft report, recently made public, is perhaps the first document in the history of independent India to take a rational approach to alcohol. At its core is the concept of social harm and how to price it. The report points out that, as in most Indian states, Karnataka taxes beer (with 5-8% alcohol) more than twice as much as spirits (40%). Moreover, premium brands such as Greater Than, an artisan gin, attract higher rates
than, for example, Blue Riband, a clear fluid produced by somebody who once overheard a description of gin. Their alcohol content—and the harm it causes—is near-identical. The report recommended switching to a system based on the amount of alcohol in the bottle, regardless of what it calls itself or how it is marketed, plus a form of consumption tax. This is the standard system in boozy nations from Australia to Britain. The committee that wrote the report is silent on revenue projections, probably to avoid giving the impression that boosting takings was the chief intent. But insiders reckon revenue would surge. Karnataka’s chief minister announced initial reforms even before the report was made public. And no wonder. It is a unicorn of a policy: sensible, remunerative and politically feasible. There will be losers, chiefly poor men who drink potent spirits. But the government report also suggests new measures to lower the risk that they will turn to hooch. The reform is likely to be copied. In India’s federal system, successful policies spread quickly. That will be a relief for the country’s drinkers of beer, wine and premium spirits. More important, it will be a victory for common sense. And all it took to get here was a shot of concentrated financial pressure stirred into eight decades of sparkling hypocrisy. That is a sobering thought.■ Subscribers to The Economist can sign up to our Opinion newsletter, which brings together the best of our leaders, columns, guest essays and reader correspondence. This article was downloaded by zlibrary from https://www.economist.com//asia/2026/06/07/money-troubles-are-driving-indias- states-to-drink
Nukes were off the agenda as Xi Jinping visited North Korea China’s notorious university-entrance exam is changing In China ride-hailing work is a last resort for rural labourers A dropout-turned-influencer shakes up Chinese science
Nukes were off the agenda as Xi Jinping visited North Korea China is wary of Russian influence and another Trump-Kim summit June 11th 2026 WHEN XI JINPING last visited North Korea, in 2019, international efforts to halt its nuclear-weapons programme were still under way. China and Russia, North Korea’s longtime patrons, had backed stiffer UN sanctions on the country as part of an American-led campaign of “maximum pressure” on its leader, Kim Jong Un. Mr Kim had just held two summits with Donald Trump, then in his first term in the White House. And though the second of those summits ended in failure, Mr Xi expressed hope on his North Korean visit that the process would continue, commending Mr Kim on his supposed efforts to denuclearise the Korean peninsula.
China’s leader harboured no such hopes on his second visit to North Korea, which ended on June 9th. One of his priorities was to counterbalance Russian influence there, which has grown much stronger since Mr Kim sent troops to fight against Ukraine in 2024. Mr Xi also aimed to reassert China’s clout as North Korea’s primary economic partner in case Mr Trump renews his diplomatic outreach to Mr Kim, as many observers expect. Some even speculate that Mr Xi may have been conveying overtures from Mr Trump. But stopping North Korea’s nuclear-weapons programme—which is far more advanced than Iran’s—appears to have fallen off China’s agenda. That could hinder any new American bid to disarm Mr Kim. Neither China nor North Korea mentioned denuclearisation in their official accounts of the visit. Instead they emphasised the historical ties between the two countries: the pair fought together in the Korean war and then signed a mutual-defence treaty in 1961. Mr Kim said strengthening the relationship was “the most important top-priority strategic work” and pledged to support China’s claim to Taiwan. Mr Xi said they reached an “important consensus”. He called for closer economic and military ties and stronger strategic co- ordination. Russia’s president, Vladimir Putin, is partly to blame for China’s shifting priorities. In exchange for help tormenting Ukraine, Russia has provided financial and other assistance that has bolstered North Korea’s economy and military build-up. The two countries have signed a new mutual-defence treaty. In addition, Russia has in effect accepted North Korea’s nuclear status. Sergei Lavrov, Russia’s foreign minister, has called it a “closed issue”. All this unsettles Mr Xi, despite his own support for Russia’s war. Like Mr Putin he has long worried that regime collapse in North Korea could lead to a unified, pro-Western Korea with American troops (of which there are 28,500 in the South) on his eastern borders. Yet Mr Putin does not appear to share Mr Xi’s concern about North Korean aggression against the South, one of China’s big foreign investors and trade partners. Nor, it seems, does Russia worry, as China does, that North Korea’s nuclear threats could help convince Japan and South Korea (both American allies) to acquire their own atomic weapons.
Mr Xi still worries about those risks, according to Chinese experts. But they say he has concluded that China cannot use its leverage to convince Mr Kim to renounce his nuclear programme without risking economic collapse there. And America cannot risk a military strike on North Korea. Since 2019 Mr Kim has not publicly committed to denuclearisation; he has tested more than a dozen intercontinental ballistic missiles; and America’s war against Iran has probably intensified his determination to retain his nuclear arsenal. On the eve of Mr Xi’s visit, Mr Kim’s powerful sister, Kim Yo Jong, declared that North Korea’s nuclear-armed status is “irreversible”. Experts believe North Korea has 50-60 warheads and South Korean officials reckon it creates enough fissile material for an additional 10-20 annually. China has not completely abandoned its denuclearisation hopes but faces “extremely severe practical challenges” to achieving that goal, said Niu Xiaoping of the Shanghai Institutes for International Studies, a think-tank affiliated with China’s government, in an interview with the government- linked China Review News Agency. Those challenges include Mr Kim’s rejection of such efforts and South Korea’s continuing debate about developing nuclear weapons or hosting American ones, she said. China’s tacit acceptance of North Korea’s nuclear status started to become clear last September, when official Chinese readouts of Mr Kim’s meeting with Mr Xi in Beijing did not mention denuclearisation, as they had after previous encounters. When Mr Trump visited China in May, the White House said he and Mr Xi “confirmed their shared goal to denuclearise North Korea”. But China said only that they discussed the Korean peninsula. And when Mr Putin visited Beijing a few days later, a joint statement made no reference to denuclearisation and expressed opposition to sanctions or military pressure on North Korea. As well as counterbalancing Russia, China hopes to complicate American military planning, says Tong Zhao of the Carnegie Endowment for International Peace in Washington. Mr Xi aims to exploit tensions between South Korea and America, which wants its own forces there to focus more on China, while South Korean forces shoulder more responsibility for the threat from the North. China is also keen to gain access via North Korea to the Sea of Japan, says Mr Zhao. Although China has recently tried to revive