The Indian alcoholic beverage sector is projected to achieve a market value of $64 billion in the coming five years. This growth is attributed to factors such as increasing incomes, urbanization, enhanced accessibility, a shift towards premium offerings, and a growing younger consumer base, as stated in a report by the International Spirits and Wines Association of India (ISWAI).
The alcoholic beverage industry presently constitutes 2% of India’s nominal GDP and provides employment to more than 8 million individuals in associated fields like agriculture, food and beverage, retail, and hospitality. The report also highlights that in addition to substantial tax contributions, the sector plays a crucial role in sustaining the livelihoods of farmers.
According to the report, India’s changing demographics, the rise of a burgeoning young middle class, and positive governmental policies could create a more favorable environment for businesses in this sector. The report urged the government to eliminate entry barriers to further facilitate growth.
In 2021, the alcoholic beverage industry, with a market value of $52.4 billion, is projected to reach $64 billion within the next five years, maintaining an annual growth rate of 6.54% between 2023 and 2027. According to the report, India is expected to become the fifth-largest contributor to global market revenues in the near to medium-term and currently represents 2% of the country’s nominal GDP.
Additionally, the ISWAI emphasized that the liquor industry provides employment to more than 8 million individuals, both directly and indirectly, constituting 1.5% of the total workforce in the nation. The majority of these employment opportunities are concentrated in interconnected fields like agriculture, food and beverages, retail, and hospitality.
During the fiscal year 2021, the alcoholic beverage sector contributed INR 2.4 lakh crore in indirect taxes to state governments, with customs duties on alcoholic beverages alone amounting to INR 2,400 crore.
The industry accounts for 24.6% of the total tax revenues generated by state governments.
According to the ISWAI report, approximately 14-19% of the total revenues of the organized food and beverage sector rely on the sales of alcoholic beverages.
Nita Kapoor, chief executive of the ISWAI, said, “The alcohol industry holds a vital position within the national economy, presenting opportunities for growth, job creation, and revenue generation. As we look to the future, the importance of the alcohol industry in India is poised to expand. Therefore, it is crucial to simplify its operational complexities, enhance its Ease of Doing Business (EODB), and unlock its full potential for growth.”
ISWAI’s membership comprises leading companies such as Bacardi, Pernod Ricard, Beam Suntory, Campari, Diageo-United Spirits, and Moet Hennessy.
