The alcoholic beverages industry’s market size is estimated to be at ₹6.2 lakh crore in CY2025 with premiumisation emerging as a key growth engine, as per a report released by the International Spirits and Wines Association of India (ISWAI).
The report noted that as consumers are increasingly trading up rather than simply consuming more, the premium segment grew at a 10.2 per cent CAGR between 2022 and 2025, compared with 1.1 per cent for cheap and 1.4 per cent for regular products.
Sanjit Padhi, CEO, International Spirits and Wines Association of India (ISWAI), said, “India’s alcobev is an industry is one of scale, and increasingly, it is an industry of value. The next opportunity is to drive premiumisation, strengthen value chains and build globally competitive Indian businesses.”
Domestic spirits market
He noted that the India-UK Free Trade Agreement is supporting premiumisation in the domestic spirits market by making bulk Scotch imports more affordable for Indian manufacturers. “The larger impact now with bulk scotch prices coming down, will be the opportunity for the Indian-made foreign liquor (IMFL) makers to enhance their blends and introduce more premium offerings and encourage consumers to trade up,” Padhi told businessline.
He pointed out that stable and long-term excise policies, improved retail infrastructure and tax rationalisation are among the key factors that can accelerate premiumisation in the country leading to better revenues.
Padhi added that rationalisation in tax structures will drive premiumisation while enabling better revenue collection.
“The industry is estimated to have a market size of ₹6.2 lakh crore equivalent to approximately 1.8 per cent of India’s nominal GDP. It generated an estimated ₹4 lakh crore in tax revenues during FY25, including central and state taxes. The sector’s total tax contribution was equivalent to approximately 1.3 per cent of India’s nominal GDP for FY25,” the report added.