In the heart of India, where tradition and modernity converge, there’s a vibrant industry that not only tantalises the taste buds but also fuels the nation’s economic engine. Imagine an industry that’s more than just a source of enjoyment; it’s a formidable economic powerhouse with a story to tell. Welcome to the captivating world of the Indian Alcoholic Beverage Industry, where indulgence meets economic influence and where every sip has a tale of prosperity to share.
Unveiling The AlcoBev Industry’s Financial Impact
The International Spirits & Wines Association of India (ISWAI), recently presented its groundbreaking report titled “Economic Value of the Indian Alcoholic Beverage Industry” to Shri Amitabh Kant, G20 Sherpa, and former CEO of NITI Aayog in New Delhi. The report outlines several key highlights:
- The Indian AlcoBev industry had an estimated market size of $52.4 billion in 2021, roughly 2% of the country’s nominal GDP (INR 3.9 lakh crore, including country liquor). This highlights the sector’s considerable economic footprint.
- Projections indicate that the Indian alcoholic beverage industry could reach $64 billion over the next five years. It will position India as the fifth-largest contributor to global market revenues.
- In the fiscal year 2021, the industry contributed a significant INR 2.4 lakh crore in indirect taxes to state governments. Customs duty on alcoholic beverages alone accounted for INR 2,400 crore.
- Alcohol revenues represent 1.2% of India’s nominal GDP, contributing 7.7% to the total tax collection and 11.7% to the nation’s indirect tax revenue. The sector also contributes 24.6% of the overall tax revenues of the states.
- Around 1,235 million litres of extra-neutral alcohol (ENA) were used to produce Indian-made foreign liquor (IMFL) and ready-to-drink alcoholic beverages in 2021. To produce 741 million litres of ENA for IMFL, 1.9 million metric tonnes of grain are required. It amounts to 0.6% of India’s total grain production.
- Approximately 724,611 farms and 3,623,057 farmers are involved in grain production for ENA. Moreover, 2.9% of the workforce in the ‘agriculture, hunting, forestry, and fishery sectors produce grains and sugarcane for ENA. It underscores the industry’s role in supporting the agricultural sector.
- The AlcoBev sector employs a remarkable 7.9 million individuals, both directly and indirectly. It accounts for 1.5% of the total workforce in the country.
- The organised Food and Beverage (F&B) industry depends on the INR 28,000 crore generated from the sales of alcoholic beverages. It contributes significantly to the industry’s overall revenues.
- India’s alcoholic beverages have untapped export potential, and fostering enabling policies can unlock opportunities for investments, jobs, and exports.
Nurturing Prosperity Across Sectors
Suresh Menon, Secretary-General of ISWAI, emphasised that the industry not only makes substantial tax contributions but also supports farmers’ livelihoods. It also has intricate connections with the food and beverage, hospitality, tourism, and packaging sectors. With the growth of the young and expanding middle class in India, per capita consumption of various goods and services is expected to rise. Streamlining business operations through constructive governmental policies can foster a conducive operational climate, benefiting all stakeholders.
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The report on the economic value of the Indian AlcoBev industry reveals the sector’s significant contributions to the nation’s economy.
Cover Image Courtesy: Canva
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