Premium brands are here to stay

India's smaller cities are experiencing a surge in liquor consumption, outpacing larger metropolitan areas, driven by a growing middle class, rising disposable incomes, and changing social norms. Premium and imported spirits are seeing particularly strong growth in these markets, indicating a shift towards higher-quality beverages.

The demand for global India’s Alcohol Industry market is expected to be valued at USD 200.0 Billion in 2025, forecasted at a CAGR of 7.2% to have an estimated value of USD 300.0 Billion from 2025 to 2035. From 2020 to 2025 a CAGR of 6.8% was registered for the market.

As India becomes more urbanized its citizens choose to adopt a more cosmopolitan outlook and start drinking alcohol. Additionally, as more Indians move into cities the market is probably going to continue expanding. The rising disposable income of the middle class shifting lifestyles and growing urbanization are all expected to contribute to the steady growth of the Indian alcohol market in the years to come. In general, the market is expanding due to the rising demand for high-end global alcohol brands.

Key growth drivers in India include: Premium-plus spirits; RTDs (Ready-to-drink, pre-mixed beverages) and Indian single malts

Due to the expansion of modern retail supermarkets and hypermarkets dominate the Indian alcohol market in terms of distribution channels. 70% of the market in 2025 will be used for landscape. Beyond conventional liquor consumers today are looking for a variety of shopping experiences. stores attracting customers to air-conditioned hypermarkets that carry every product category in one location.

Supermarkets are in charge. first-rate shelf space to display alcohol and have knowledgeable employees to help with selections. thorough niche and category management. Locally specific assortments encourage impulsive buying.

New launches in the Indian alco-beverage market have a bias towards the prestige and luxury segment. Indian alco - beverage market across segments has seen multiple launches but there is a clear trend that popular and prestige segments which contribute close to 80% of the overall are not seeing new launches. Current players are well entrenched in the segment and the incremental benefit of new launches in these segments is lower. This also limits the opportunity to drive volumes for new brands. This points to high entry barriers in the segment as profitability is possible only at enhanced scale of business.

As part of further liberalization of the sector, by lowering constricting taxes and duties, and by promoting ease of doing business, India can speed up growth of the organized alco-bev industry. Not only could this offer consumers safer, better-quality options, but they also can lead to increased government revenue. Decreasing the price gap between the organized and non-organized industries would allow consumers to "trade up" to more desirable products and thus increase the market for high-end, branded alcoholic ones.

IWSR projects premium-plus malt Scotch volumes to grow at 19 per cent and blended Scotch at 13 per cent. With the sector set to touch Rs 5.3 lakh crore in revenue by FY26, it’s clear—India is drinking better, not just more.

With a CAGR exceeding 11 per cent, industry leaders across the board agree: the next chapter in India’s premium spirits story is being written beyond the metros—where aspiration meets access, and culture meets craft.