‘In 2024, India alcobev mkt crossed 408 mn cases, and should grow 5% this yr as reforms, premiumisation up consumption'

Mint

09-07-2025

NEW DELHI
:
India's alcoholic beverage (alcobev) industry crossed 408 million cases in 2024, with premium spirits driving growth in an increasingly reform-friendly regulatory environment. New data accessed exclusively byMint shows that structural changes—particularly at the state level—are poised to push this figure even higher in 2025, with a projected growth of over 5%.
The International Spirits & Wines Association of India (ISWAI), which represents global players like Bacardi, Diageo-United Spirits, and Campari, said India remains one of the largest liquor markets globally, with the sector growing at a steady 3% CAGR.
"Calendar year 2025 should top last year's perform and a slightly higher growth rate at around 5% or more on the back of structural reforms in large markets such as Uttar Pradesh (which has increased its retail store density), Andhra Pradesh (which has encouraged privatisation of retail) and stability in policies such Rajasthan (four year excise policy) and Haryana (with one that's increased from 12 to 21 months)," said Sanjit Padhi, the body's CEO, speaking toMint. 'In addition, smaller markets like Jharkhand are moving towards privatisation, which should also help."
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In the first six months of the year, markets like Uttar Pradesh, Andhra Pradesh and Rajasthan are showing strong growth as well, the body's top executive said. This is because there are new restructured excise regimes to attract investments in some of these states. The first half of 2025 has already shown strong growth in states with restructured excise policies. For example, UP's merging of its beer and liquor retail networks has increased access, while Rajasthan's switch to a four-year policy has led to a 55% rise in Indian Made Foreign Liquor (IMFL) volumes.
In Andhra Pradesh, modernised liquor outlets are expanding into tier II and III towns. 'The outlook for 2025 is quite positive," Padhi said, adding that better retail infrastructure is enhancing consumer experience.
Fast-paced growth
According to industry estimates, India's alcobev market has been growing at about 3-4% year on year for the last decade in terms of volumes, and it was valued at $59.85 billion in 2023.
While he did not share absolute numbers in terms of its current value, what is also driving growth is that each year, Padhi said, is the 15-20 million people entering the country's legal drinking age, giving the country one of the fastest-growing consumer bases globally.
"The country's median age is under 30, and younger consumers are seeking more variety, brand trust and better experiences—even if they are drinking a little less frequently. India's population is now the largest in the world, and while price sensitivity remains in many parts of the country, there is clear movement—especially in urban areas—toward better-quality beverages, driven by a younger, more aspirational consumer," he added.
'Premiumisation at every level'
The growing popularity of Indian single malts and high-quality blended whiskies is also pushing up demand for premium products. At present, imported spirits still make up a small share—just 2.6% of total volumes—but they are gaining ground. Bulk Scotch imports now account for 79% of all Scotch brought into India, with most being bottled locally. This has helped reduce costs and improve margins. 'Rising private investments, a growing middle class, and increasing workforce participation are all contributing to greater consumer spending power," Padhi said.
Paul P. John, chairman of John Distilleries, toldMintthat while the Indian consumer has been price-sensitive, there's a visible evolution in how quality is perceived today, and the mindset shift to spend on better quality spirits is increasing.
"Earlier, quality was almost exclusively associated with high-priced or imported brands, but that mindset is also shifting. Consumers are now recognising that world-class quality can also come from homegrown brands, and they're willing to pay a premium when they see genuine value," he said.
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He said this shift has been pivotal to the growing success of John Distilleries' premium offerings, especially in the single malts segment, which are crafted in India but consumed globally.
According to ISWAI's data, India sold 11 million cases out of 408 million sold in 2024 in the deluxe and super premium deluxe categories.
According to the top industry players, companies are also moving up the value chain. Amar Sinha, chief operating officer at Radico Khaitan, speaking toMint, said many large national alcohol companies are moving away from low-MRP (maximum retail price) mass brands due to shrinking margins.
Demand for quality
'This is primarily because input costs have gone up, and there are fewer margins at the lower end of the segment. Manufacturers are moving towards the upper end of the consumer bracket. The consumer is also getting exposed to better quality products now, vis-à-vis some years ago. Consumers are moving a few steps up. The growth in the deluxe and premium segments is here to stay, and lower-MRP products will start to fade," Sinha toldMint. "If this segment, while small right now, will grow at 15-20% CAGR, then we expect it to double in five years," he added.
In 2024, super-premium Indian-Made Foreign Liquor grew 23% in 2024, while premium IMFL grew 18%, and growth in the larger, older deluxe segment slowed to 6%. 'Premiumisation may seem small when viewed in isolation, but its impact goes beyond just the volumes.
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For states looking to de-emphasise their focus on alcohol, upward category movement will still drive higher revenues than regular categories, even if overall consumption stays flat. This is because consumers are moving up the value chain and drinking better in each category," said Padhi. Also, this is due to discretionary income growing, too.
Despite rising interest in global brands, locally produced spirits continue to dominate, accounting for over 97% of total sales in 2024. However, imported spirits—both bottled at origin and those bottled in India—grew 8.3% year-on-year, compared to 3.2% for domestic brands, pointing to rising interest among affluent urban consumers.