India tops global charts in alcohol consumption growth

India has emerged as the world’s fastest-growing beverage alcohol market, topping 20 key global economies for the third consecutive half-year period, according to the latest IWSR data. Total beverage alcohol consumption in the country rose 7% year-on-year in the first half of 2025, crossing 440 million 9-litre cases. The surge is being powered by a young and expanding consumer base, rising disposable incomes, and a growing preference for premium and craft segments — with Indian whisky continuing to lead the market.

As per the IWSR data, India posted the highest growth in total beverage alcohol (TBA) consumption among 20 major global markets for the third consecutive half-year period, marking a 7% year-on-year rise in the first half of 2025. India’s beverage alcohol market is entering a new phase of transformation, driven by favourable demographics, rising incomes, and evolving consumer preferences. While the market is still less developed than those in mature economies such as the US, Japan, or Germany, its growth trajectory has been remarkable.

The country’s total beverage alcohol volume has now surpassed 440 million 9-litre cases, positioning India as one of the most dynamic alcohol markets in the world. A major factor behind this surge lies in India’s vast population and the rapid expansion of its middle class. With a young demographic base and increasing urbanisation, the number of consumers with the purchasing power and aspiration to trade up to premium products has grown significantly. The population aged between 25 and 45 years — the core drinking-age cohort — is driving both volume and value growth. This, coupled with evolving social norms and a growing appetite for experimentation, has made India one of the most attractive growth markets for global and domestic alcohol producers alike.

However, what is equally notable is the regulatory transformation underway across several Indian states. Historically, the country’s beverage alcohol industry has been hindered by complex, bureaucratic, and highly localised regulatory structures. Each state maintains its own excise policies, taxation systems, and distribution models, which has long posed challenges for producers and marketers.

In recent years, though, a shift has begun. Key state governments have started adopting a more pragmatic and business-oriented approach, recognising the industry’s immense contribution to state revenues and employment generation. Excise duties on alcoholic beverages constitute one of the largest sources of non-GST revenue for many Indian states. As such, state policymakers are increasingly viewing the sector through a developmental lens rather than a purely regulatory one.

Simplified licensing procedures, digitalisation of permits, and revised excise policies aimed at attracting investment are now being observed in states such as Maharashtra, Haryana, and Karnataka. This gradual easing of bureaucracy, while uneven across the country, is paving the way for greater operational efficiency and faster product rollouts, ultimately fuelling industry expansion.

IWSR data shows that spirits positioned at the higher end of the standard price range and above are outperforming value segments, indicating an overall quality enhancement among domestic distillers. Indian whisky, in particular, continues to dominate the spirits landscape, growing by 7% to exceed 130 million 9-litre cases. At the same time, segments such as vodka and gin are witnessing double-digit and steady single-digit growth respectively, reflecting diversification in consumer choices.

In both absolute and percentage GDP growth terms, developing markets like India are forecast to outperform mature economies over the coming decade. This strong macroeconomic foundation aligns closely with IWSR’s projections for beverage alcohol value growth. As income levels rise and aspirations shift toward higher-quality consumption, more Indian consumers are gravitating toward premium and imported brands, especially in urban centres and emerging Tier-II cities.

Among global developing markets, India and China stand out as the twin engines of growth for the beverage alcohol industry. Both countries exhibit robust consumer confidence, with respondents showing optimism about their personal financial situations and reporting strong gains in alcohol spending. While data from China may skew positively due to cultural factors influencing self-reporting, India’s optimism is grounded in a real and measurable rise in disposable income, lifestyle changes, and exposure to global consumption patterns.

Moreover, India’s growth story in beverage alcohol is being reinforced by structural shifts in distribution and marketing. The proliferation of e-commerce platforms, the rise of modern retail, and the evolution of on-trade experiences — such as premium bars, craft breweries, and mixology-focused lounges — are redefining how consumers discover and engage with alcoholic beverages. Although e-commerce sales of alcohol remain restricted in many states, pilot projects and discussions around regulated digital sales channels hint at potential future liberalisation.

The diversification of consumer tastes has also given rise to new growth pockets. Niche categories such as Irish whiskey, agave-based spirits, and Indian single malts are expanding at a rapid pace, catering to a growing segment of discerning drinkers. Notably, Indian single malts are steadily gaining ground on Scotch malts, as local producers focus on innovation, craftsmanship, and regional authenticity. At the same time, ready-to-drink (RTD) beverages and low-alcohol options are resonating with younger, health-conscious consumers who value convenience and moderation.

IWSR’s long-term outlook projects India to become the fifth-largest alcohol market globally by volume by 2027, overtaking Japan and later Germany by 2033. With China, the US, Brazil, and Mexico expected to remain ahead, India’s rise signifies a fundamental shift in global industry dynamics.

---

Read more

India’s alcoholic beverage industry is in high spirits!

Indian whiskey brands have an opportunity to move up the ladder 

 

---

FAQs

1. Why is alcohol consumption rising in India?
A young population, higher incomes, urban lifestyles, and growing social acceptance are driving alcohol consumption in India.

2. Which alcohol category dominates the market?
Whisky leads the market, followed by rum, vodka, gin, and ready-to-drink beverages.

3. How big is India’s alcohol market now?
India crossed 440 million 9-litre cases in total beverage alcohol sales, making it the fastest-growing among 20 global economies.

4. What is driving premiumisation in India’s alcohol industry?
Consumers are increasingly choosing premium and craft brands as incomes and global exposure rise.

5. What’s the outlook for India’s alcohol sector?
India is projected to become the fifth-largest alcohol market globally by 2027, driven by demographics and evolving preferences.