India’s alcoholic beverage market to hit US$61.97B by FY26 amid rising premiumisation, steady demand 

INDIA – India’s alcoholic beverage (alcobev) industry is projected to grow by 8–10% in revenue, reaching Rs 5,30,000 crore (US$61.97 billion) in fiscal year 2026, according to a report by market intelligence firm Crisil Ratings.  

This follows a robust compound annual growth rate (CAGR) of 13% recorded over the past three fiscal years. 

Crisil Ratings stated that the industry’s operating profitability is set to rise by 60–80 basis points (bps), supported by ongoing premiumisation trends.  

The report emphasized that strong accruals, reduced leverage, and minimal debt-funded capital expenditure will continue to support healthy credit profiles across the sector. 

The alcobev sector in India is largely dominated by spirits, which account for 65–70% of total industry revenue.  

The remaining portion is contributed by beer, wine, and country liquor. Industry volume is expected to rise by 5–6%, driven by increased urbanisation, a growing drinking-age population, and rising disposable incomes. 

Jayashree Nandakumar, Director at Crisil Ratings, noted, “This fiscal, healthy volume and ongoing premiumisation will support revenue growth despite the absence of major price revisions.”  

She added that revenue from premium and luxury segments—those priced above Rs 1,000 (US$11.71) per 750 ml—is expected to grow by 15%. These segments are projected to contribute 38–40% of total spirits revenue in FY26, up from 31–33% in FY23. 

The report indicated that rising volumes and improved realisations will bolster profitability through stronger contribution margins and improved cost absorption, even with a slight increase in input costs.  

Prices for extra neutral alcohol (ENA) are anticipated to increase by 2–3% due to heightened demand from India’s ethanol blending program. Barley prices are also forecast to rise by 3–4% amid tight supplies and strong demand. 

In addition, the report highlighted that glass bottle prices are expected to remain firm due to stable supply and growing demand. Alcohol companies are likely to raise product prices by 3–4% as premium offerings continue to expand. 

Manufacturers also expanded capacity by 15–20% over the last two years driven by sustained growth. With current capacity utilisation at 70–75%, there is ample headroom to meet future demand. As a result, no significant debt-funded capex is expected in FY26. 

Telangana increases liquor prices 

Meanwhile, liquor prices in Telangana were increased on May 18 following the restoration of the Special Excise Cess on Indian Made Foreign Liquor (IMFL) and Foreign Liquor (FL), excluding ordinary liquor, ready-to-drink beverages, and beer.  

The state government set the cess at Rs 10 (US$0.12) per 180 ml bottle, with proportional hikes for larger volumes. 

Suppliers have been directed to dispatch updated stocks at the revised maximum retail prices and notify retailers in accordance with legal packaging regulations. 

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