India is the world's fastest-growing alcohol market when global demand cools

Mint

2 days ago

India isn't just raising a toast, it's raising the bar. The country is now the fastest-growing alcohol market among the world's top 10 liquor-consuming nations even as global demand dipped.
Beer outpaced all other categories in India in 2024, while whisky continues to dominate, putting the country on a path to cross $50 billion in alcohol sales by 2031, according to new data exclusively shared with Mint by London-based spirits consultant IWSR. India could even possibly dethrone France and the US as the world's top Scotch market by volume by 2027, it said.
The country's alcohol market grew 9% by value last year, reaching just under $40 billion, IWSR said. That's an increase of over $3 billion in 12 months, marking India's entry into the top five by value last year. Volume was up 6%, placing the country eighth globally by size—just ahead of the UK and Spain.
Rising urbanization, higher incomes and a young population are driving demand, especially for premium brands.
'India is a spirits market dominated by whisky, with a total alcohol by volume momentum that most markets presently lack. Scotch remains the pinnacle for many, almost certainly made more accessible by the recently announced India-UK FTA," said Jason Holway, a senior consultant at IWSR. 'It seems a question of when, not if, demand for Scotch overtakes that seen in France and the US, with both Bottled in India (BII) and Bottled in Origin (BIO) likely to contribute."
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BII is alcohol imported into India in large quantities and bottled domestically, typically priced between ₹1,000 and ₹2,000, covering both local and international brands. BIO includes liquo fully produced and bottled overseas—such as Scotch whisky from the UK—and then imported as a finished product.
Global growth cools
India's growth contrasts with global trends. Worldwide alcohol consumption dipped 1% by volume in 2024, even as value edged up 1%.
'Contractions in the US and China contrasted sharply with gains in India and Brazil in 2024," IWSR said. 'The largest contributors to value growth over the next decade are developing markets, India, Brazil, Mexico and South Africa, with an expected incremental growth of $28 billion."
Still, IWSR predicts the global alcohol market will grow by $34 billion, or 3% by value, over the next 10 years despite economic and political challenges, with India expected to contribute much of that growth. From 2024-29 alone, the market is projected to grow by $16 billion, or 1%, across 160 countries.
Beer on a high
India's beer was the fastest-growing category, rising 9% in 2024. Wine followed with 4% growth and spirits grew 3%. According to IWSR's forecast, the country is expected to contribute nearly 50% of global alcohol market value growth through 2034, led by whisky and beer.
India is already one of the largest destinations for Scotch shipments—including bulk supplies used in domestic blends—and is projected to become the world's third most valuable alcohol market by 2032, overtaking the UK and trailing only China and the US. Whisky drives the consumption. Dark spirits—whisky, brandy, dark rum and gold tequila—made up 95% of all spirits consumed in the country.
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Rising disposable incomes and a deeper understanding of premium and single malts have also contributed to the growth of India becoming one of the world's largest whisky-consuming markets, said Paul P. John, chairperson of John Distilleries Ltd. 'In addition, the growing affordability of imported brands is further boosting brand awareness."
Scotch whisky alone saw a 6% jump by volume and 7% by value in 2024 over the year prior. It's likely to get a further fillip from the recently signed India-UK free trade agreement that's expected to make imported Scotch more accessible. This will open up the market to UK spirit manufacturers too.
Last month, India and the UK agreed to cut the 150% import duty on Scotch and gin to 75% to start with, and gradually lower it to 40% over the next 10 years. Mint recently reported that Diageo India, the maker of Johnnie Walker, Ketel One, Tanqueray, Captain Morgan and McDowell's No. 1, expects the move would lead to a high single-digit drop in retail prices for consumers.
Demand is also rising fast enough that India could soon outpace long-time Scotch markets like France and the US, IWSR said
Demographic advantage
Alcohol sales in India are expected to grow 8-10% to ₹5.3 lakh crore in FY26, with profits also likely to improve, Mint reported recently, citing data from Crisil ratings. The report, based on 25 major liquor firms, estimates a 5–6% rise in overall volumes, led largely by spirits like whisky and rum, which contribute nearly 70% of industry revenue.
'India's spirits market is set for strong growth over the next decade, and we're very bullish," said Paramjit Singh Gill, CEO of the consumer division at Globus Spirits, which makes Terai gin and Doaab single malt, among others. 'Rising disposable incomes in tier 2 and 3 cities are driving demand, with more consumers in these markets willing to spend on premium spirits."
Consumption is also propelled by a young, drinking-age population. The country is projected to reach the height of its demographic advantage around 2041, when people aged 20 to 59—the core working-age group—are expected to make up 59% of the total population, according to the Economic Survey of 2018-19.
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While the base is still small, Gill expects the premium segment to grow at a high double-digit rate. 'Younger consumers are also prioritizing experiences and exercising greater choice. Plus, millions of Indians are entering the legal drinking age each year, further expanding the market."
Still, while the appetite is strong, the average price point remains modest. Just 1% of the country's spirits market in 2024 was classified as 'premium" (priced above ₹2,820 for a 750ml bottle). Most of the market—93%—sat firmly in the 'value" segment, with bottles priced between ₹180 and ₹1,133