Diageo is exploring ways to improve its presence in the Indian state of Tamil Nadu, which prohibits the sale of alcoholic drinks bottled outside its borders.

A Diageo spokesperson confirmed to just-drinks on Friday (31 October) that the drinks giant is interested in setting up a bottling operation in Tamil Nadu.

The group's comments follow a local news report claiming that Diageo intends to bottle several brands, including Smirnoff vodka, inside the state.

India is seen as a strongly emerging market for wine and spirits.

A Diageo spokesperson told just-drinks: "Tamil Nadu is one of the Indian states that does not permit the sale of alcohol bottled outside of the state and Diageo currently has no manufacturing infrastructure there. Therefore, Diageo is exploring the possibility of a local bottling arrangement in Tamil Nadu.

"This review is part of Diageo's normal business processes."

Tamil Nadu is one of the Indian states facing a renewed battle with the EU at the World Trade Organisation. EU officials claim the state has continued to unfairly restrict market access for foreign wine and spirits brands.

Diageo already has a joint venture in India with Radico Khaitan, although has more recently explored a possible tie-in with United Spirits, owned by Indian billionaire Vijay Mallya.