How to crack India’s complex spirits market
Independent communications expert Chris Patt examines the opportunities and obstacles in India’s fast-growing spirits market, highlighting the importance of local partners in navigating its complex landscape.
Like the US, India can be a challenging market to operate in with different regulations across states. However, despite its complexity, the nation offers huge opportunity for spirits producers. According to IWSR data, total beverage alcohol (TBA) volumes in India expanded at a compound annual growth rate (CAGR) of 3% between 2019 and 2024. Last year, the market grew by 6% and is projected to rise by 4% in 2025.
IWSR anticipates growth in the market to continue with volumes rising by 3% between 2024 and 2034. Spirits, wine and beer are all expected to record CAGR growth of 3%-4% over the next decade.
“India’s alcohol consumption growth remains structurally strong, driven by demographics, urbanisation, and premiumisation,” says Patt.
India is often described as one of the fastest-growing spirits markets in the world, backed by its vast population and rising incomes. IWSR notes that the legal-drinking-age population is fast approaching one billion potential consumers.
Regarding trends in the nation’s spirits industry, Patt cites “premiumisation and the rapid rise of tier two and tier three cities”.
He adds: “Consumers are increasingly trading up, moving from mass to premium and craft offerings, driven by higher disposable incomes, global exposure, and evolving taste preferences.
“At the same time, growth is no longer limited to metros; smaller cities are becoming key consumption hubs, with new consumers actively exploring international brands and experimenting with diverse categories. Together, this shift towards better-quality products and wider geographic demand is accelerating the market’s overall growth in India.”
Patt believes many regulations that exist in the market remain “unclear, unchanged or internally contradictory for decades”.
He explains: “There is no single regulator. Instead, companies deal with excise departments, state revenue authorities, local municipal bodies, enforcement agencies, food and drug administrations, police, and sometimes political intermediaries – all operating with overlapping powers.
“Interpretation of law often depends less on written policy and more on who is in power, who is transferred, and who is willing to take responsibility. Rules can change overnight through notifications, circulars, or cabinet decisions, with retrospective impact.”
According to Patt, Indian states often add excise hikes, label re-registration fees, route-to-market changes, or cesses – which can sometimes cost hundreds of millions of dollars for large players.
He warns that the biggest cost can be retrospective taxes based on altered interpretations of valuation, transfer pricing, or margins.
‘Critical buffer’
To navigate these challenges, Patt advises that brands work with a local partner in India.
“A strong Indian partner acts as a critical buffer – absorbing operational shocks, managing on-ground relationships, and handling the daily firefighting that defines the alcohol beverage business in India,” he explains.
Patt believes that without a local partner, multinational companies from markets like the UK or the US are “directly exposed to constant disruptions, regulatory volatility, and execution gaps”.
Multinational operators face slower decisions, weaker relationships, and greater exposure to regulatory and operational risks, Patt warns. A local partner “understands power structures, enforcement behaviour, and informal resolution mechanisms”.
“India needs rationalised state-by-state regulations, quicker label registrations, and a stable, transparent tax structure,” says Patt, on what would help spirits companies operating in India.
“For smaller producers, easier access to distribution, lower entry barriers, and support for market visibility are critical. For global players, consistency across states and reduced compliance friction matter most. Ultimately, growth depends on cutting red tape, enabling scale, and creating a level playing field where both emerging and established brands can operate efficiently.”
Patt emphasises the need for companies to “enter India only with fear, caution, and the right partner”.
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