The Kerala Supreme Court has given the tourism industry a last-minute reprieve after temporarily halting the state-wide alcohol ban which was due to start at the weekend.
It ordered the Kerala government to postpone the ruling until the end of the month after a legal challenge by the hospitality industry.
Hoteliers fear a booze ban would severely damage the Kerala tourism industry.
The court will now hear arguments from bar and restaurant owners.
The Kerala government wants to close down all 700 bars in the state immediately and phase out shops selling liquor over a ten year period.
Only five-star hotels would be exempt from the ban.
One of the main petitioners fighting the ban is the Kerala Hotels and Restaurants Association.
"The ball is now in the honourable High Court of Kerala and we presume that they will make an acceptable and judicious judgment in the interests of tourism," said the association’s president G. Sudhiesh Kumar.
"Let’s hope for the best, but we prepare for the worst," he added.
State alcohol taxes and fees brought in more than 1 billion in the 2012-2013 financial year and Kerala reputedly has the highest levels of alcohol consumption per capita in India.
