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Indian alcoholic beverage industry may reach $64 billion over the next 5 years, ET Retail

New Delhi: Indian alcoholic beverage industry is expected to reach $64 billion over the next five years on the back of rising incomes, urbanisation, increased access, premiumisation and younger consumers, according to a report by International Spirits and Wines Association of India (ISWAI).

The alcobev sector already accounts for 2% of India’s nominal GDP and generates employment to over 80 lakh people, in related sectors such as agriculture, F&B, Retail and hospitality. The report said beyond substantial tax contributions, the sector supports farmers’ livelihoods.

India’s demographic shift, growth of a young and expanding middle class and constructive governmental policies can make business in this sector more conducive, the report said, and called upon the government to remove entry-barriers.

The alcobev sector, with a market size of $52.4 billion in 2021, would reach $64 billion in five years, growing at an annual 6.54% between 2023-27. India is to be the fifth-largest contributor to global market revenues in the near-medium term, and accounts for 2% of the country’s nominal GDP, as per the report.

ISWAI further said the liquor sector generates employment to over 80 lakh people, directly and indirectly, and accounts for 1.5% of the total manpower employed in the country. Employment opportunities are primarily in related sectors such as agriculture, food and beverages, retail and hospitality.

In FY 2021, the alcobev contributed Rs 2.4 lakh crore in indirect taxes to state governments. Customs duties on alcobev alone accounted for Rs 2,400 crore.

The sector contributes 24.6% of overall tax revenues of states.

As per the ISWAI report, almost 14-19% of overall revenues of the organized F&B sector depend on 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 members include Bacardi, Pernod Ricard, Beam Suntory, Campari, Diageo-United Spirits and Moet Hennessy.

  • Published On Nov 1, 2023 at 07:02 PM IST

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