India's market for distilled spirits is rapidly expanding, creating a significant opportunity for U.S. exporters. With a rising urban middle class, a spend-y affluent class, and evolving preferences, U.S. producers have an opening to capture market share. Although Scotch and European wines dominate due to historical ties, the growing popularity of American bourbon and other high-quality American wines and spirits indicates a major shift in consumer tastes.
A Growing Market Opportunity
India is currently the world’s largest consumer of whiskey, accounting for nearly 48% of global whiskey consumption, with an estimated 230 million cases consumed in 2023. Demand for imported premium whiskey and other spirits is steadily increasing with India’s premium spirits market projected to grow at a compound annual growth rate (CAGR) of 8.2% from 2023 to 2028.
India’s urban middle class, now surpassing 300 million people, is expected to reach over 580 million by 2025, representing 41% of the population. By 2025, consumer spending in India is forecasted to hit $4 trillion, doubling from $2 trillion in 2019. These facts combined with increasing disposable income levels is fueling demand for high-quality imported goods, including premium spirits.
Shifting Preferences Toward American Spirits
Demand for American spirits, especially bourbon whiskey, is on the rise, especially India’s metropolitan cities like Mumbai, Delhi, and Bangalore. Bourbon exports to India grew by 20% in 2021, reflecting a steady rise in interest in uniquely American offerings. Gin is also gaining traction, with consumption in India’s metro cities growing at a CAGR of 12%, driven by younger consumers exploring new drink experiences.
Moreover, the market for Ready-to-Drink (RTD) cocktails in India is expected to grow at an annual rate of 10.3% through 2026. This growth is largely driven by young professionals who prefer convenient, lower-alcohol options—a trend that aligns with the U.S.’s expertise in producing innovative RTD spirits.
Tapping into the Make in India Advantage
India’s Make in India initiative incentivizes local manufacturing, offering tax breaks and tariff reductions for companies producing goods domestically. For U.S. spirits companies, this presents a strategic opportunity to export in bulk and bottle locally, significantly reducing logistical and import costs while enhancing market appeal. Domestic bottling not only aligns with regulatory requirements but also connects with Indian consumers who value locally-produced goods.
Bottling in India can reduce tariffs and shipping expenses by up to 60%, allowing U.S. exporters to price their products more competitively while maintaining authenticity and quality. This model also helps circumvent the federal import duty on alcoholic beverages, which averages around 150%, making it a financially viable option.
Andy's Tips for Success
According to Andy Chapman, Founder of FEAST Global, “Packaging quality is often the deciding factor in whether Indian consumers choose your product over a competitor’s. In the premium spirits segment, consumers are incredibly discerning about presentation. A well-designed bottle or label can make all the difference.”
This emphasis on aesthetics and brand storytelling should not be overlooked when planning your entry into the Indian market. One way to make a premium package feasible financially is to partner with an India-based company to bottle in India.
Understanding India’s Regulatory Environment
Navigating India’s highly regulated market requires careful planning, as state-level alcohol laws differ significantly. Distribution rules, taxes, and import duties vary from one state to another, making a nuanced strategy essential. For example, Maharashtra levies one of the highest excise duties, while Goa, known for its tourism, offers relatively relaxed regulations. Such variations can impact product pricing and positioning, making a tailored approach crucial for success.
Why Partner with FEAST Global?
Breaking into the Indian market involves more than just market knowledge—it demands a strategic plan backed by local expertise. At FEAST Global, we’ve been actively building connections and gaining in-market experience since 2019. Our founders’ frequent travel to India, combined with an on-the-ground team and established buyer networks within the wine and spirits import, hospitality and retail trade pan-India, equips us to help U.S. exporters navigate complexities and seize growth opportunities.
Services Offered by FEAST Global to Support Distilled Spirits & Wine Suppliers Seeking to Export to India:
- Market Research & Assessment: We provide an easy-to-read report with detailed analysis of consumer trends, competition, pricing structures, and regulatory landscapes to help identify your best entry strategies.
- B2B Matchmaking: We connect you with vetted distributors, importers, luxury hotel chains and retail partners to ensure your brand reaches the right channels.
- Trade Lead Concierge Services: We offer end-to-end support on the ground, ensuring that your market entry is seamless and successful.
Take the Next Step with FEAST Global
The opportunity to enter India's spirits market is hot! If you're ready to explore your opportunity in India, contact FEAST Global to learn more about our Export Market Assessment tailored to your business. Learn how we can help you leverage data-driven insights, in-market expertise, and strategic partnerships to thrive in this fast-growing market.
Contact us today to discover your market potential and capitalize on India’s demand for high-quality U.S. wine and spirits. Let’s raise a glass to your future success!
