Valued at US$52.4 billion, the sector contributes significantly to India’s economy, accounting for nearly 2% of the nation’s GDP (FY21).
This year, the growing acceptance of the sector was showcased by the participation at the World Food India 2024, organised recently in the capital. During a session on ‘Indian Spirits Brands Going Global: Promotion and Innovation’, industry experts discussed the evolution and future of India’s alcobev industry. Sanjit Padhi, CEO, International Spirits and Wines Association of India (ISWAI), led the session, and the industry experts shed light on India’s success in producing world-class spirits, particularly single malts, with globally renowned brands leading the charge.
The sector is a critical economic driver, with an estimated domestic volume of 390 million cases of branded spirits and an excise revenue contribution of Rs 3.4 lakh crores. From 2019 to 2023, whilst the total spirits industry grew at a CAGR of 2.6%, the premium segment witnessed double-digit expansion. This shift reflects increasing disposable incomes and a rising propensity for premiumization, with the share of premium spirits rising from 42% to 49%.
Commenting on the growing alcobev sector, Sanjit Padhi, CEO, ISWAI said in a statement, “The Indian alcobev industry, directly and indirectly, employs over 7.9 million individuals. In addition, exports have experienced a significant surge, with a 16% increase in volume and a 20% increase in value in the past year, indicating a favourable shift in product mix and positioning. Imports are stagnant, and exports are growing at 22 %, and in the near future, we could become a trade surplus.”
Indian single malts, a growing segment of the spirits market, have aligned themselves with the “Make in India” initiative. With domestic sales of an estimated 3,50,000 cases, which is at par with imported malts, this segment demonstrates the country’s capacity for creating world-class products.Commenting on future trends, Padhi said, “As India continues to show positive growth, it is crucial to drive innovation, quality, and R&D so as to create a thriving ‘Make-In-India’. We look forward to working with the Government of India in creating an ecosystem that will further boost exports.”Focusing on ‘Make-in-India’, Mr. Richard McCallum, Group CEO, UK India Business Council, said, “India is a pivotal partner for the UK. It is an investment destination, an export market, a source of technology and talent and an important supplier of goods and services. What happens in India matters for the UK and the world. We encourage UK businesses and stakeholders to engage with India in a collaborative spirit – one of genuine partnership – aligning with key initiatives like ‘Make in India’ and ‘Aatmanirbhar Bharat’.”
Commenting on key challenges faced by the Indian alcobev industry towards ‘Make-in-India’ products internationally, Mr. Sridhar Pongur, COO, John Distilleries, said, “The Indian government has done a fantastic job with the Make-in-India concept. We need to ensure that Indian products are known to the international community, and for this, we need to have experience-based sessions. For this, we require the embassy’s support, and all manufacturers should come together for the single malts to promote Indian whisky as a category.”
One of the key highlights discussed is that the industry is confident that ambitious initiatives like the Business Reform Action Plan will enhance the Ease of Doing Business, particularly at the state level. These efforts will drive meaningful changes, such as greater pricing freedom and key reforms, helping alcobev businesses operate more efficiently and subsequently adding to increased growth and job creation.
Sanjit Padhi, CEO, ISWAI, said, “To sustain this growth, the industry looks forward to continued support from the government and policymakers for export policy standardization, tax rationalization, and market access facilitation. As the industry looks to the future, these measures will be crucial in maintaining the momentum of India’s growing spirits industry truly building the ‘Make in India’.”
India, already the fifth-largest global market for alcoholic beverages, is well-positioned to expand its footprint. The Indian spirits industry is transitioning from a price-sensitive mass market to one focused on value creation and premiumization. Indian single malts paved the way for this shift, competing successfully with global brands.
